Wallsten and Rhyan Examine Entrepreneurship and Social Media Use
Contact: Amy Smorodin
June 3, 2014 – Despite the widespread use of social media by entrepreneurs and small businesses, little analysis has been performed regarding its effectiveness, state Technology Policy Institute’s Scott Wallsten and Corwin Rhyan in “Social Media and Entrepreneurship: The Case of Food Trucks.” To help shed light on this issue, the authors examine the relationship between the use of social media and internet services by mobile food truck operators and the truck’s ability to stay in business.
In the paper, Wallsten, TPI Vice President for Research and Senior Fellow, and Rhyan, TPI Research Associate, use a dataset of over 250 mobile food trucks in the Washington DC area. They find:
- Trucks with a Facebook page and website have a higher likelihood of staying in business longer. This correlation could represent the benefits of using social media for promotion. It is also possible that creating a social media page or website is an indicator of owners who put more effort into their business and, therefore, are more likely to survive.
- All but one truck made use of Twitter, which is logical due to the mobile nature of the trucks and the need to broadcast their location. Trucks that that send out two tweets a day are more likely to stay in business than those who send fewer. However, sending out more than two tweets a day did not have increased impact.
- The number of reviews a truck receives, which could indicate demand, is correlated with its ability to stay in business. However, the average review score itself is not correlated with a truck’s likelihood of staying open.
“Social Media and Entrepreneurship: The Case of Food Trucks,” is available on the TPI website.
The Technology Policy Institute
The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at https://techpolicyinstitute.org/.