Academy of Manageraen! Executive, 2000. Vol.

14, No,

Beyond social capital: How

social skills can enhance
entrepreneurs' success
Robeit A. Baion and Gideon D. Marfcman
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 skillsspecific competencies that help them interact effectively
with othersmay 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 fate advantage of such opportunities
may reap important benefits.

and demonstrated its major features. When he was

done, the president rose and announced: "We'll be
back in a few minutes." At that point, he and the
other executives filed out of the room. Less than ten
minutes later they returned, and when the president held out his hand and smiled, the author knew
that things had gone well. "Okay, Professor," the
president remarked, "we definitely want your product. I'll leave you to work out the details with Neville
and Stan" (the V.P. for engineering and the COO).
In the months that followed, the author got to
know the president of the company quite well, and
on one occasion asked him how he was able to
make a decision about the author's product so
quickly. His answer was enlightening: "Your prototype was good and I could see that you had
something new. But it was the way you handled
yourself during the meeting that mattered most. I
could tell right away that you get things done
that you're not just talk. And I could see that you
were someone I could work with. I'd never make a

In 1993 and 1994 the first author of this article

obtained two patents for a new producta desktop unit that combined air filtration with such additional features as noise control. Since he had
only limited manufacturing experience, he decided that the best way to bring this invention to
market was to license these patents to an established business. The author contacted a number of
companies that appeared to be potential partners,
and was invited to visit several. The third company
he visited ultimately licensed both patents.
The events of the fateful visit to that company
are stamped indelibly on the author's memory.
They began when he entered a room where the top
people in the company were already seated: the
president and CEO, the COO, and the vice presidents for engineering and marketing. After brief
introductions, the CEO turned to the author and
said: "Okay, Professor, show us what you've got."
The author then made a brief presentation, during
which he described the benefits of his invention
106

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Baron and Markman

deal with anyone if they didn't measure up on

those dimensions."
But there was more: He went on to explain that
the author would never have gotten in the door if
he hadn't been a professor at a well-known university. In addition, the president revealed that his
company had done a background check on the
author prior to his visit. Aiter all, as the president
put it, "We didn't know you from a hole in the wall,
and wanted to make sure that you were not some
kind of flake."
This personal anecdote illustrates two of the major points of this article. First, social capitalthe
actual and potential resources individuals obtain
from their relationships with others (through a favorable reputation, high status, and personal referrals) often helps entrepreneurs get through the
door, to gain access to venture capitalists, potential customers, and others. Second, once inside,
their ability to interact effectively with others
their social skillsplays a key role in their subsequent success.
What is Social Capital and What Benefits Does It
Offer?
Social capital refers to the actual and potential
resources individuals obtain from knowing others,
being part of a social network with them, or merely
from being known to them and having a good reputation.' In a sense, social capital provides individuals with an important type of credentiala
favorable social identity that can be converted into
significant, tangible benefits. What kind of benefits does a high level of social capital yield? These
include enhanced access to information^the
more people one knows, the more information, and
often, the more accurate information, one receives^^and increased cooperation and trust from
others.^ After all, a friendor even merely an acquaintance of a friendis easier to trust than a
total stranger. In addition, social capital has been
found to translate directly into financial outcomes;
it is positively related to the compensation received by both managers and CEOs.^ That social
capital is also beneficial to entrepreneurs is suggested by recent findings that entrepreneurs possessing high social capital based on networks, status, personal ties, and referrals are more likely to
receive funds from venture capitalists than entrepreneurs who are lower on this dimension.^
The Importance of Social Skills
As important as social capital is, we believe it is
only part of the total story where entrepreneurs'

107

success is concerned. We propose that social

skills, too, play an important role. Perhaps the
best means of illustrating this point is through
the following simple exercise. Consider this
question: How do organizations select new employeesespecially those who will play a key
role? Is this function carried out solely on the
basis of the candidates' social capital, such as
their reputation and referrals? Probably not. In
most cases, we believe, this is a beginning
rather than an end to the selection process. Only
candidates possessing high levels of social capital are initially consideredpersons with favorable reputations, an established record in the
field, a degree from one of the right schools, work
experience with good employers, and so on.
Once a short list of persons possessing high social capital is assembled, however, it is the impression the candidates make on the individuals
involved in the final selection that largely determines whether they are actually hired. Some
candidates for employment appear to walk on
water prior to a visit, but once present in the
flesh, quickly sink beneath the surface. Such individuals possess high levels of social capital,
but are lacking in skills that permit them to interact effectively with others, and this becomes
readily apparent during face-to-face encounters
with them.
A number of specific skills play a role in determining the capacity of individuals to interact effectively with others. These include the ability to
read other persons accurately, to make a good first
impression on them, and to persuade or influence
them.^ Several of these skills will be examined
below.''
A second reason for our focus on entrepreneurs' social skills is that, in our view, social
capital is often the result of such skills. How, for
instance, does a good reputation originate?
What determines the breadth and depth of an
individual's social network? The ability to interact effectively with others often provides an important foundation for these aspects of social
capital. Understanding the role of social skills in
entrepreneurs' success may contribute to our understanding of the origins and impact of social
capital. The relationship between social capital
and social skills is analogous, in some respects,
to the relationship between resource stock and
resource flows in organizations.^ Social capital
can be viewed as an accumulated asset, while
skills in interacting with others are one factor
that influences the level of this asset.
Third, the effects produced by social skills may
be broader or longer-lasting than those of social

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Academy of Management Executive

capital. Social capital may well exert its primary

impact fairly early in the process, determining
which entrepreneurs gain initial access to venture
capitalists, customers, and suppliers. In contrast.

The relationship between social capital

and social skills is analogous, in some
respects, to the relationship between
resource stock and resource flows in
organizations,
the effects of skill in interacting with others may
persist and continue to shape the nature of entrepreneurs' relations with such persons on a longterm basis. Capitalists, customers, or suppliers ultimately respond to the entrepreneurs' actual
behaviorwhat they say or donot solely to the
entrepreneurs' reputation or status. As the English
novelist Samuel Butler put it^: "We are not won by
arguments that we can analyze, but by tone and
temper, by the manner which is the person himself." Social skills come into play in many situations^especially ones that are tense or stressful.
Thus, their effects can be long-term and long-lasting, and may continue to shape relations between
entrepreneurs and other persons for as long as
they do business.
Which social skills are most important to entrepreneurs' success? And how do these skills influence entrepreneurs' efforts to start new business
ventures?
To address the first question, we carefully reviewed the extensive body of literature on social
skills with two criteria firmly in mind: relevance of
each social skill to outcomes in business settings,
and relevance to tasks performed by entrepreneurs. Four specific social skills w^ere identified as
being most germane to entrepreneurs' success.'^
These skills are social perception, impression
management, persuasion and influence, and social adaptability.
SociaJ Perception
Social perception refers to accuracy in perceiving
others, including perceptions of others' motives,
traits, and intentions. It refers to the ability to correctly gauge current moods or emotions of others,
their underlying motives, and their personal characteristics. This skill appears to be very useful in
many business contexts. For instance, interviewers
high in social perception do better at choosing the
best job applicants than those who are lower in
this skill." Managers who are more adept at read-

ing their subordinates are better able to say

whether substandard performance is the result of
lack of motivation or resources or some other
cause. Accurate identification of the causes of poor
performance is a necessary first step in selecting
effective corrective actions.'^
Skill in social perception is relevant to entrepreneurship in several ways. For example, consider
the process of negotiation. Entrepreneurs engage
in this activity frequently, especially during the
early days of their new ventures.'^ They must negotiate with partners, prospective employees, venture capitalists, suppliers, customers, and many
others. Individuals who are skilled at social perception often find it easier to determine whether
their opponents are being honest or are bending
the truth to their own advantage. Because knowledge of an opponent's actual break-even point
plays an important role in successful negotiations,'* proficiency in social perception may be an
important plus for entrepreneurs, and can contribute significantly to their success. A concrete example of this skill in action is provided by recent
negotiations between representatives of Tektronix,
Inc. and the owner of a Malaysian electronics factory. Economic turmoil in Asia had lowered the
price of the factory to the point where the American
company viewed it as a potential bargain. During
face-to-face negotiations, however, one member of
the Tektronix team suspected that the Malaysian
owner was not being entirely candid about various
liabilities of his operation, such as long-term debt.
This perception, based on subtle nonverbal cues,
turned out to be accuratethe owner was concealing several liabilities. Tektronix's negotiating
team held out for even better terms, and ultimately
purchased the factory for 20 percent less than its
own initial offer.^^
Social perception is also relevant to another key
task performed by entrepreneurschoosing partners and key employees. Individuals often attempt
to conceal their true motives and intentions, and
usually strive to place themselves in a favorable
light. The ability to cut through such subterfugeto perceive others accurately despite their
efforts to conceal such informationcan be invaluable to entrepreneurs when choosing partners
and hiring key employees. Being adept at perceiving others accurately can be of considerable benefit in these contexts, and provide entrepreneurs
with an important competitive edge.
Impression

Management

Impression management involves proficiency in a

wide range of techniques for inducing positive re-

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Baron and Maikman

actions in othersfrom efforts to enhance one's

own appearance and image, through agreeing
with others, flattering them, and giving them small
gifts during an initial meeting. Skill with respect to
Impression management has been found to make
job applicants more likely to get the job,'^ and to
boost the ratings received by employees in annual
performance reviews.''' Skill at impression management may also be extremely helpful to entrepreneurs in their efforts to obtain needed capital.
In describing how they go about making the decision to support or not support a particular project,'^
venture capitalists report how that entrepreneurs
present themselves during face-to-face meetings
and presentations is often a factor to which they
give considerable weight.^^ For example, the first
author has worked with a consulting firm in the
Boston metropolitan area that specializes in finding financial backing for entrepreneurs. The first
step in the process is an initial meeting between
entrepreneurs and staff of the consulting company,
during which the entrepreneurs are asked to describe their ideas and the reasons they are seeking
financial support. After this meeting, the consulting company's staff meet to decide whether or not
to work with the entrepreneur. The quality and
feasibility of the entrepreneur's idea receive careful attention; but the overall impression the entrepreneur has made on staff of the consulting company usually carries the most weight.
The impressions of entrepreneurs formed by venture capitalists, prospective customers, and others
are not entirely the result of conscious efforts at
impression management by the entrepreneurs. On
the contrary, the past experience, attitudes, and
personal characteristics of the people with whom
entrepreneurs interact play an important role.
Moreover, recent findings indicate that many factors influencing first impressions are not directly
under the voluntary control of the persons involved
and are not readily managed by them. These include certain aspects of their physical appearance
and subtle features of their speech.^^ In many
cases, however, overt efforts at impression management are effective, so being adept at this skill
can indeed yield important benefits for entrepreneurs.
Persuasion and Influence
Persuasion and influence are skills for changing
the attitudes or behavior of others in desired directions. Because other people don't always share our
views, and often behave differently from the way
we would prefer, most oi us try to influence the
attitudes, beliefs, or behavior of others every day.

109

Individuals vary greatly in their ability to use such

tactics.22 Research findings indicate that such differences are related to success in a wide range of
occupations, including sales, law, and medicine.^^
Consider Paul Brown, an inventor who recently
devised a means for sending data over electric
power lines.2^ A venture capital firm offered funding for his start-up company, but only if he could
first conduct a successful field test. To meet this
requirement. Brown turned his powers of persuasion on his neighbors, and convinced 25 of them to
convert their homes to his system so that all their
phone calls and Internet connections would be carried over power lines. The field test was successful, and Brown, whose effectiveness at persuasion
was an important plus, received the funding he
sought.
The television documentary about the origins of
the personal computer industry, "Triumph of the
Nerds," offers another example of the potential
benefits for entrepreneurs of skill at persuasiveness. Describing why his company decided to advance millions of dollars to a start-up venture
known as Apple Computer, a senior venture capitalist says he was impressed with the energy, intelligence, and especially the persuasiveness of its
young founder, Steve Jobs. Jobs' social capital was
low, or nonexistent, and he dressed like a hippy,
but he expressed his ideas so forcefully and persuasively that he got the funding he sought.
Social

Adaptability

Social adaptability involves the ability to adjust to

a wide range of social situations and to feel comfortable with individuals from diverse backgrounds. People high in social adaptability are
able to talk to virtually anyone about almost anything, can introduce themselves to strangers with
relative ease, and readily adjust to a wide range of
new social situations. In short, they can be described as social chameleons, capable of adapting
their behavior in order to blend comfortably into
almost any social context. A large body of research
findings suggests that persons high in such abilities attain greater success and more rapid promotions in many different contexts than those low in
such abilities.25 Indeed, it has even been found
that professors high in social adaptability receive
higher ratings from their classes than those low in
social adaptability.
Social adaptability appears to be relevant to
activities performed by entrepreneurs that are crucial to the success of their new ventures. For instance, especially early on, entrepreneurs must
make many cold calls on strangers. These persons

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Academy o/ Management Executive

no

may be totally unfamiliar with the entrepreneur

and his or her company, yet entrepreneurs must
approach them and attempt to form business relationships. A high level of social adaptability can
be very beneficial to entrepreneurs in this context.
Consider, for instance, the efforts of Tace Chalfa, a
Seattle entrepreneur, to build a thriving business
in the resale of vintage sneakers.^^ To obtain her
unusual merchandise, Chalfa approaches the
owners of scores of thrift stores and places hundreds of cold calls to people listed in back issues of
Runner's World magazine. She also randomly
phones employees of Nike and other large sneaker
manufacturers, because they often have discontinued models from their companies. Evidence that
Chalfa is successful in these efforts is that her
store. Red Light, did over $1 million in business in
its first year of operation.
In sum, accuracy in social perception, skill at
impression management, skill at persuasion and
influence, and a high level of social adaptability
may be relevant to important activities carried out
by entrepreneurs as they attempt to establish new
ventures and become successful. We should note
that, initially, we considered including an additional skill, emotional intelligence, within our
framework. This term refers to the ability to regulate one's own emotions and influence the emotions of others, as well as to motivate oneself and
restrain impulses.^'' Although emotional intelligence has received a great deal of attention in
research and the media, efforts to study it systematically suggest that its components may, in fact,
be largely independent, rather than part of a single concept or cluster. Among these components,
skill at social perception is perhaps the most important.^^ Further, no measures of emotional intelligence exist that meet accepted standards of reli-

ability. For these reasons, we felt that including

emotional intelligence in the current framework
was not justified.

How Entrepreneurs' Social Skills Can Influence

Their Success
Having identified several social skills that may be
relevant to entrepreneurs' success, we will now
examine some of the mechanisms by which these
skills work. Table 1 describes the potential relevance of each of the social skills to the performance of important tasks faced by entrepreneurs.
Research findings^^ indicate that a substantial
proportionperhaps an actual majorityof new
ventures are founded by teams of entrepreneurs
rather than by single individuals.^"^ For instance, in
a recent survey. Inc. magazine reported that 57
percent of its sample of 500 high-growth private
U.S. companies were started by at least two
founders. To the extent that these partners possess
excellent social skills, face-to-face interactions between them should be facilitated and this, in turn,
may contribute to the success of their new ventures.
The potential importance of such factors is noted
by John Doerr, a partner of the venture capital firm,
Kleiner Perkins Caufield & Byers, and a prominent
figure in Silicon Valley. As Doerr puts it; "What
there is in our business is plenty of plans, plenty of
entrepreneurs, and plenty of money. What there's a
shortage of is great teams."^^ This experienced
venture capitalist, who has funded a large number
of successful new companies, rates close and effective teamwork between founding partners as a
crucial ingredient in entrepreneurs' success. In our
view, such relationships are often encouraged by a

Table 1
Social Skills Potentially Relevant to Entrepreneurs' Success
Social skill

Description

Social perception

Ability to perceive accurately the emotions,

traits, motives, and intentions of others

Impression management

Tactics designed to induce liking and a

favorable first impression by others

Persuasion and social influence

Ability to change others' attitudes and/or their

behavior in desired directions

Social adaptability

Ability to adapt to, or feel comfortable in, a

wide range of social situations

Examples oi potential relevance

to entrepreneurial success
Making presentations to investors and
customers, attracting and selecting partners
and employees, conducting negotiations
Obtaining financing, attracting key
employees, dealing with customers and
suppliers
Obtaining financing, recruiting key
employees, dealing with customers and
suppliers, conducting negotiations
Establishing business relationships with
strangers (i.e., cold calls), and working with
people from diverse backgrounds

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Baron and Markman

high level of social skills on the part of the entrepreneurs.

A second way in which excellent social skills
may prove beneficial to entrepreneurs involves
face-to-face interactions between the entrepreneurs and many persons outside their companies.
Effective interactions may assist entrepreneurs in
performing tasks that are crucial to their success,^^
such as raising needed capital, attracting and selecting competent employees, and persuading customers and suppliers to do business with their
company under favorable terms.^^ The more effectively they perform such tasks, the greater their
overall success.
A third important context in which social skills
can contribute to entrepreneurs' success involves
the formation of business alliances.^'* Such alliances are a growing source of competitive advantage ior emerging firms.^^ As entrepreneurs strive
to identify market inefficiencies, create new products or services, gain access to financial resources,
acquire legitimacy, and capture market share, they
frequently recognize that alliancesparticularly
ones with strong, existing companiescan enhance their odds of survival.^^ Indeed, business
alliances have been found to be positively associated with the rate of new product development and
the creation of shareholder wealth for new ventures.3' Such alliances, in turn, often involve considerable information sharing and technology
transfer between the participating companies
conditions that require high levels of trust and
cooperation. The success of such relationships often rests on the development of positive personal
relationships between the partners. Recent findings suggest that a positive relationship between
the partners in business alliances is often a more
effective deterrent to opportunism and exploitation
than traditional legal contracts.^^ High levels of
social skills on the part of key personnel in participating companies may contribute to such positive
personal relationships between them, and hence
to the success of the alliances they have formed.
The potential role of entrepreneurs' social skills
in their ability to form business alliances is illustrated by Gwendolyn and Eric Johnson, AfricanAmerican entrepreneurs who founded Geric Home
Health Care, a company specializing in providing
care for bedridden people in inner-city neighborhoods.^^ Because most of the company's employees
are welfare mothers who live in the neighborhoods
they serve, the company appears to face a daunting set of problems. Despite this unusual employee
base, Geric has grown rapidly and is highly profitable. Its success is due, in part, to the Johnsons'
ability to form business alliances with nursing

111

homes, hospitals, and public agencies. They approach these organizations and explain their basic
strategy: by hiring employees who live near patients, they can provide the kind of reliable service
the nursing homes, hospitals, and public agencies

Recent findings suggest that a positive

relationship between the partners in
business alliances is often a more
effective deterrent to opportunism and
exploitation than traditional legal
\
contracts,
want, but cannot readily obtain. The Johnsons further explain that their employees, most of whom
have grown up in the neighborhoods they serve,
are willing to visit patients in locations where
even police officers sometimes fear to go. They
also offer to take the cases nobody else typically
wantsquadriplegics, multiple sclerosis patients,
and people on ventilators who have been severely
damaged by a combination of alcohol and drugs.
The result is impressive: The Johnsons have succeeded in establishing mutually profitable business relationships with many other organizations.
The Johnsons are so successful in part because of
their ability to form close, personal ties with representatives of these companies and with prospective employees. They are deeply religious, and impress people with their sincerity and desire to help
the patients they treat and to provide good jobs for
their employees. As Eric Johnson puts it: "The spiritual part is a very integral part of this business.
Without caring, loving folks, we'd be headed for
disaster."
We suggest that social skills play an important
role in entrepreneurs' success because such skills
facilitate effective relations between founding
partners, as well as with many people outside and
inside their companies, and assist entrepreneurs
in establishing business alliances that are very
valuable to their new ventures.
I

The Benefits of Social Skills

I

Numerous findings and proposals in the literature

on entrepreneurship indicate that entrepreneurs'
social skills can influence their success. For example, it has been found that entrepreneurs whose
companies are successful engage in more communication with others, and are more effective in this
activity, than entrepreneurs whose companies
fail.'^ Similarly, such cooperation may increase
when the entrepreneur and venture capitalist

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Baton and Maikman

share a positive social or business relationship.*^

Along the same lines, personal contacts and relationships are often included on lists of the key
ingredients in new venture formation.*2 Finally,
recent research designed to examine the impact of
social skills on entrepreneurs' success provides
clear support for the relationship we suggest. For
example, one study conducted with two different
groups of entrepreneurs found that two social
skillssocial adaptability and social perception
were significant predictors of the financial success
of founders of high-tech companies and founders
of cosmetics distribution organizations.''^
The impact of social skills on entrepreneurs'
success may be mediated by current feelings or
moods, as suggested by basic research on affirmative states. Positive moods, in turn, can lead
to enhanced judgments and decisions about the
entrepreneur. (See Figure 1, which summarizes
these points and also illustrates the possible
impact of social skills on social capital mentioned earlier in this article.) A substantial body
of evidence indicates that people who are high in
such social skills as impression management
and enhancing their own personal appearance
induce higher levels of positive moods or feelings in others than people who are lower in such
skills.*^ Other research indicates that positive
affective states can strongly influence judgments and decisions, making these more favorable. This appears to be true even if the judgments and decisions in question are totally
unrelated to the causes of the positive moods or
feelings/^ Combining these findings, socially
skilled entrepreneurs may well evoke higher levels of positive affect among those with whom
they interact. This, in turn, can lead others to
evaluate the entrepreneurs' business plans,
products, or companies more favorably. In short,
because they evoke higher levels of positive affect in others,''^ entrepreneurs who are high in
social skills gain important advantages in obtaining funding, attracting and hiring desirable
employees, establishing and maintaining effective relationships with co-founders, and concluding favorable business arrangements with customers and suppliers.'*'

Implications and Applications

Our assertion that social skills can play an important role in entrepreneurs' success has important
implications for entrepreneurs and for others wishing to assist them in their efforts to start new ventures. The most important of these implications are
as follows;

113

Training in social skills can help many entrepreneurs succeed. Such training would be especially valuable in cases where entrepreneurs'
ideas are sound, and where their experience,
technical competence, and motivation are all
high, yet they fail in their efforts to start new
ventures. Such negative outcomes may stem
from a lack of social skills on the part of the
entrepreneurs. They are lacking, to some degree,
in the skills necessary to negotiate effectively
with others, to persuade them, or to induce them
to share the entrepreneurs' beliefs about what
their new venture can and will become.'is As a
result, entrepreneurs lacking in social skills
make poor first impressions, fail to generate enthusiasm for their ideas or business, and may
even annoy or irritate persons who hold the fate
of their new ventures in their hands. Equipping
such entrepreneurs with enhanced social skills
can assist them to avoid these pitfalls, and can
contribute to their ultimate success. Given the
important contribution to society made by entrepreneurs, such efforts appear to be well-justified ."^
Training in social skills is readily available
and it works. Psychologists have offered social
skills training for decades to assist individuals
experiencing problems that interfere with their
careers, marital relationships, or personal adjustment. Such training is highly effective, and
can be carried out within a short time frame. It
often involves very straightforward procedures,
such as showing clients videotapes of their interactions with others. When they view such
tapes, many people gasp audibly, and utter such
comments as, "I had no idea I came across like
that!" or "I didn't realize I was doing that!" When
such experiences are coupled with guided practice in improved techniques for interacting with
others, rapid progress toward enhanced social
skills is often readily achieved.^
Training in social skills is already included in
the curricula of many business schools and is
used by many organizations. At our university,
and many others, all undergraduate business
majors must take a one-credit course on leadership. This course focuses, in part, on practical
skills, such as performing well in job interviews,
and considers social skills, as well. Similarly,
many organizations train employees in sales
and customer relations in techniques for interacting effectively with others. The success of
such efforts strongly suggests that entrepreneurs, too, may benefit from training designed to
enhance their social skills.

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Academy d Management Executive

Enhanced social skills can contribute to entrepreneurs' social capital. Individuals who interact effectively with others leave a residue of
positive feelings and good will behind them.
This residue can help such persons expand their
personal networks and acquire excellent reputationsimportant ingredients in social capital.
Increased social capital can facilitate entrepreneurs' access to financial capital, information,
and markets. A clear illustration of the link between social skills and social capital is provided
by a recent experience of the senior author, who
team-teaches a course on the role of creativity in
entrepreneurship with a Nobel laureate, physicist Ivar Giaever. Dr. Giaever recently served as
a judge for presentations by graduating MBAs at
a nearby college. After this experience, he offered two observations to the senior author's
class. The MBA students who received the highest ratings were generally the ones who, because of excellent social skills, presented themselves most effectively while delivering their
talks. These students were also the ones who
benefited most from the networking session with
members of the local business community in
that followed the presentations.
Training in social skillsor at least discussion
of this topicshould be part of all programs in
entrepreneurship. The benefits of social skills
training might be especially helpful for women
and minoritiesgroups that face important obstacles as entrepreneurs. Women and minorities
are currently underrepresented among entrepreneurs, and face daunting barriers to obtaining
financing for new ventures. Statistics indicate
that in recent years, less than two percent of
available venture capital funds has been
awarded to women.^' Enhanced social skills
might help them to overcome some of these obstacles.
Entrepreneurs can be persuaded to seek such
training. That students can be exposed to discussion of and practice in social skills as part of
their studies is apparent. And the popularity of
courses in leadership suggests that they are, in
fact, motivated to obtain such experiences. But
we are also optimistic about the chances of attracting practicing entrepreneurs to such training. Many successful entrepreneurs appear to be
aware of the important role of effective social
skills in their own achievements. For instance,
the most recent winner of our university's Entrepreneur of the Year award was asked, after her
formal presentation, to pinpoint the major
causes of her success. The first factor she mentionedand the one she emphasized most

February

stronglywas: "My ability to get along with a

wide range of peoplethat was absolutely crucial." Several members of the audienceboth
current and would-be entrepreneursapproached the senior author with requests for information on how they might improve their own
social skills. The key, then, may simply lie in
getting the message out: Once entrepreneurs
recognize the importance of their face-to-face
interactions with others, they may quickly and
vigorously seek to act on this conclusion.

"My ability to get along with a wide

range of peoplethat was absolutely
crucial."
We are certainly not alone in recognizing the
important role of social skills in personal success.
When asked to describe the conditions necessary
for a happy life, Albert Einstein^^ replied with the
following equation: "If A is success in life, then A =
X -I- y + z, where x = work, y = play, and z =
keeping your mouth shut." By "keeping your mouth
shut," Einstein referred to specific social skillsfor
example, the ability to read others accurately and
so avoid making statements that would annoy
them or produce a less-than-favorable first impression. This article echoes Einstein's sentiment: Social skillswhat he termed "the z factor"may
well be one ingredient in the complex array of
variables that, acting together, determine entrepreneurs' success.

Endnotes
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116

Academy oi Management Executive

Robert A. Baron is professor oi
management at Rensselaer
Polytechnic Institute. His current research focuses on cognitive and social iactors in entrepreneurship. He has been a
visiting iellow at Oxford University and a program director
at the National Science Foundation. He holds three U.S. patents and is the author oi numerous books, including Behavior
in Organizations, 7th ed., and
SociaJ Psychology, 9th ed. Contact: [email protected].

February
Gideon D. Markman is an assistant professor oi entrepreneurship at the Laily School of
Management and Technology,
Rensselaer Polytechnic Institute.
He received his Ph.D. in entrepreneurship from the University of
Colorado at Boulder. His research interests include innovation management and technological entrepreneurship. particularly the adversity quotient,
cognitive mechanisms, and social skills oi entrepreneurs. Contact: [email protected].