Entrepreneurial Ecosystem Narratives
Success Stories and their Impact on Startup Environments
Master Thesis – Final Version Student: Friedrich Alexander Crone Student Number: 11385634
Supervisor: dhr. dr. G.T. Vinig
Institution: University of Amsterdam (UvA) – Business School Program: MSc Business Administration
Track: Entrepreneurship and Innovation Date: 23.06.2017
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Statement of Originality
This document is written by Student Friedrich Alexander Crone, who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion
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Acknowledgements
I wish to thank all participants of my interviews and survey for taking the time to help me with my research and giving me an honest view of their opinion of Amsterdam’s startup environment.
Special thanks to my friend Irena Chloe, who supported me from the beginning with helpful insights and connections in Amsterdam’s startup environment. Her help simplified my attempts to gain access to Amsterdam’s startup community.
I also want to thank my supervisor, dr. T. Vinig, and the University of Amsterdam, who facilitated the great course Entrepreneurship and Innovation, which guided me to my topic about entrepreneurial ecosystems. I want to say thank you for such outstanding support and educational experience with many interesting experiences and insights into modern science. Another special thanks to my family and girlfriend Anna Gmeiner, who supported me during my studies in Amsterdam at all times.
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Abstract
The topic of entrepreneurial ecosystems is a relatively new field for scholars. Past research mainly focused on the physical factors of entrepreneurial ecosystems, such as access to talent human resources and risk capital. Social and cultural impacts on entrepreneurial ecosystems are completely understudied. Therefore, this study focuses on the connection between entrepreneurial narratives in form of success stories and entrepreneurial ecosystems. Recent literature developed assumption about possible effects of entrepreneurial narratives on an ecosystem level. However, many aspects of these suggestions have not yet been quantified. One type of entrepreneurial narrative is defined as entrepreneurial success story. On an individual, entrepreneurial narratives in form of success stories are able to create entrepreneurial identities. This function supports resource acquisition and wealth creation. Based on this theory, entrepreneurial success stories are examined on an ecosystem level. The research uses a mixed methodology consisting of qualitative interviews within Amsterdam’s startup community and a quantitative questionnaire in Amsterdam’s and Hamburg’s entrepreneurial ecosystem. The findings suggest a significant effect of entrepreneurial success stories on the attraction of entrepreneurial environments. Furthermore, this study shows, that entrepreneurial ecosystem narratives are able to form ecosystem identities that help developing entrepreneurial environments by increasing the attraction for human resources and financial capital.
Keywords: Entrepreneurial Ecosystem, Entrepreneurial Narratives, Entrepreneurship, Amsterdam, Success Story, Startup Environment, Cultural Entrepreneurship
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Table of Content
1 Introduction ... 7
2 Literature Review ... 11
2.1 Entrepreneurial Ecosystems ... 11
2.2 Entrepreneurial Ecosystem of Amsterdam ... 18
2.3 Entrepreneurial Narratives ... 20
2.4 Entrepreneurial Ecosystem Narratives ... 24
2.5 Success Stories ... 31 2.6 Propositions ... 34 3 Research Design ... 36 3.1 Conceptual Framework ... 36 3.2 Research Hypotheses ... 37 3.3 Mixed Methodology ... 37 4 Research Results ... 44 4.1 Qualitative Results ... 44 4.2 Quantitative Results ... 53 5 Discussion ... 67
5.1 Implications for Practitioners and Policymakers ... 75
6 Conclusion ... 77
7 Limitations and further Research ... 79
8 References ... 80
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List of Tables
Table 1: Ecosystem Success Factors ... 17
Table 2: Reliability of Items ... 53
Table 3: Perception of Ecosystem Identity Amsterdam ... 54
Table 4: Extraversion Amsterdam ... 55
Table 5: Frequency Success Stories and Networking Amsterdam ... 56
Table 6: Success Stories Amsterdam ... 57
Table 7: Perception of Ecosystem Identity Hamburg... 57
Table 8: Extraversion Hamburg ... 58
Table 9: Frequency Success Stories and Networking Hamburg ... 59
Table 10: Success Stories Hamburg ... 60
Table 11: Comparison of Ecosystems with Descriptive Means... 60
Table 12: Correlation Items of Frequency Success Stories and Networking ... 62
Table 13: Correlation Main Variables ... 63
Table 14: One-way ANOVA Frequency Success Stories and Networking with Attraction to Ecosystem... 63
Table 15: One-way ANOVA Frequency Success Stories and Networking with Perception Ecosystem Identity ... 64
Table 16: One-way ANOVA Perception Ecosystem Identity with Attraction to Ecosystem .... 64
Table 17: Factorial ANOVA Frequency Success Stories, Frequency Events, Frequency Networking with Attraction to Ecosystem ... 65
Table 18: One-way ANOVA Frequency Success Stories with Perception Ecosystem Identity . 65 Table 19: One-way ANOVA Time in Ecosystem with Frequency Success Stories ... 66
List of Figures
Figure 1: Conceptual Framework ... 377
1 Introduction
The topic of entrepreneurial ecosystems is a relatively new field for scholars, and their structure and set of participants were understudied for many years. (Neck et al. 2014, Roundy 2016) In recent years, research about entrepreneurial environments has gained much more attention throughout the world through the growing success of established ecosystems such as Silicon Valley. (Isenberg 2010, Feld 2012, Kantis et al. 2012, Breznitz et al. 2014, Motoyama et al. 2014, Roundy 2016) Entrepreneurial ecosystems are regional compilations of several entrepreneurial parts that include actors, institutions, social structures and cultural values, which together create entrepreneurial activities. (Mack et al. 2016, Roundy 2016)
In recent research, scientists have mainly focused on the physical factors of entrepreneurial ecosystems, which are already well explored. Physical factors in past research include access to new financial capital, the number of growth oriented entrepreneurs, the density of supportive institutions such as accelerators and incubators, professional service institutions such as law and accounting companies, physical infrastructure, government support and the density of high-qualified employees provided by local universities. (Neck et al. 2004, Mack et al. 2016, Roundy 2016) The importance of these factors in entrepreneurial ecosystems is well examined.
In contrast to physical factors, past research has largely neglected the social and cultural values of entrepreneurial ecosystems. Nevertheless, recent literature has created theoretical frameworks for social factors to account for their potential influence on ecosystems. Research into these social aspects focuses on the relational aspects and the complexity and depth of
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networking between entrepreneurs within ecosystems. (Motoyama et al. 2014, Spigel 2015, Mack et al. 2016, Roundy 2016)
One important social factor within an ecosystem is the communication of values, culture and knowledge through entrepreneurial narratives. (Doney 1998, Srinivasan 2004) The process and function of communication through narratives in ecosystems is still under-explored; however, recent research has created a framework for such narratives and identified different types. (Roundy 2016) One type of entrepreneurial narrative that might have a great impact on the development of ecosystems is standing out – entrepreneurial success stories. (Feld 2012, Spigel 2015, Mack et al. 2016, Roundy 2016)
This research examines a recently suggested connection between entrepreneurial success stories and entrepreneurial ecosystems. (Roundy 2016) On an individual level, entrepreneurial success stories can form an entrepreneur’s identity, create legitimacy and, therefore, helping him or her acquire resources for further development. (Bruner 1991, Lounsbury et al. 2001, Martens et al. 2007, Down et al. 2008, Brown 2008) The aspect of identity creation is raised to the ecosystem level to discern whether entrepreneurial success stories form an ecosystem’s identity and attract resources to the ecosystem for further development, as is suggested by recent literature. (Roundy 2016)
Past research has not thoroughly examined or even quantified possible effects between success stories and entrepreneurial ecosystems, though a framework exists. (Roundy 2016) Since entrepreneurial ecosystems are perceived as important economic growth engines that create jobs and wealth for society, every aspect that could help to develop and improve such ecosystems is of great interest to policymakers and society. (Acs et al. 2008) Governments
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from all over the world have already tried to develop entrepreneurial ecosystems by improving well-studied physical factors. (Kantis 2012) But these attempts often lead to the common mistake of copying Silicon Valley and neglecting the local characteristics and strengths of the own ecosystem. If entrepreneurial success stories have a significant impact on the development of the entrepreneurial ecosystem, supporting these success stories could be an interesting and powerful tool to strengthen an ecosystem and support its development.
In the past three years, some scholars have begun focusing on entrepreneurial narratives and their impact on entrepreneurial ecosystems. (Motoyama et al. 2014, Spigel 2015, Roundy 2016). One article that stands out and creates a compelling framework about entrepreneurial ecosystem narratives was created by Roundy in 2016. While this framework forms the basis for this research, Roundy’s framework of entrepreneurial ecosystem narratives has not been further investigated and has no empirical evidence. (Roundy 2016) Therefore, this reasearch tries to verify and to extend the recent framework and assumptions made by Roundy, which leads to the following research question that will be examined and analysed in the following sections of this thesis:
“Do entrepreneurial narratives in the form of success stories affect the development of entrepreneurial ecosystems?”
This research has been conducted using a mixed-method methodology to investigate Roundy’s assumptions of entrepreneurial ecosystem narratives and to quantify some aspects of the framework. The narrative type “success stories” and its functions “identity creation” and “attraction” are examined within Amsterdam’s and Hamburg’s entrepreneurial ecosystems. For the study’s qualitative component, several interviews were conducted in
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Amsterdam to identify characteristics of Amsterdam’s entrepreneurial environment and to examine possible effects of success stories. Amsterdam was chosen, because of its high density of entrepreneurial activity. (Gautier et al. 2017) For study’s quantitative component, a survey was carried out in Amsterdam and Hamburg to quantify the connection of identity perception, success story frequency, and attraction to ecosystems. The sample size of the research consists, out of all participants, of the entrepreneurial ecosystem of Amsterdam and Hamburg.
The following section offers an overview of recent literature about entrepreneurial ecosystems, entrepreneurial narratives, entrepreneurial ecosystem narratives, and success stories. A theoretical framework for the research is constructed, and hypotheses are developed and presented. Afterward, the research design, with the qualitative and quantitative methodologies, will be explained following the presentation of the quantitative and qualitative research results. Next, the research results will be discussed and compared to the theory framework. Finally, yet importantly, a conclusion considers the implications for policymakers and recommendatiosn for further research.
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2 Literature Review
This section presents relevant literature. The literature review focuses on past and recent literature within entrepreneurship theory, narrative theory and entrepreneurial ecosystem theory. Of interest is the connection between entrepreneurial narratives and entrepreneurial ecosystems. This section is divided into five pertinent topics: entrepreneurial
ecosystems, entrepreneurial ecosystem of Amsterdam, entrepreneurial narratives, entrepreneurial ecosystem narratives and success stories.
2.1 Entrepreneurial Ecosystems
Entrepreneurial ecosystems have gained increasing attention in the recent past after scholars understudied them for many years. (Acs et al. 2008, Feld 2012, Breznitz 2014, Motoyama 2014, Roundy 2016) Literature used different combinations of names to describe entrepreneurial ecosystems, including startup environments, startup communities and entrepreneurial environments. (Roundy 2016) Entrepreneurship is a process that discovers, exploits and creates innovative goods and services by recognizing and executing opportunities. (Shane et al. 2000) Entrepreneurial ecosystems are complex constellations of interactions between various actors and institutions that enable entrepreneurial activity. (Isenberg 2010, Mack et al. 2016, Roundy et al. 2016) In his research in 2016, Roundy defined entrepreneurial ecosystems as “sets of actors, institutions, social structures and cultural values
that produce entrepreneurial activity.” (Roundy 2016: 233) Startup environments are known
for their great contributions to innovation, technology, and economic development. (Roundy 2016) Well-functioning ecosystems are an important factor in job creation and wage growth. (Acs et al. 2008, Eschker et al. 2016) Since governments have realized that entrepreneurial
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ecosystems are able to transform economies, scholars and policymakers are interested in discovering those factors and characteristics crucial to developing successful entrepreneurial ecosystems. (Roundy 2016) In Europe and Asia, many governments have decided to push innovation and the growth of local entrepreneurial ecosystems. (Gautier et al. 2017) Good examples of successful environments are the top three startup communities in the Global Startup Ecosystem Report and Ranking 2017: Silicon Valley, New York, and London. (Gautier et al. 2017)
Past research has focused mainly on physical characteristics of ecosystems, such as the physical infrastructure, supportive frameworks, density of entrepreneurs and access to resources. (Neck et al. 2004, Ramraj et al. 2012, Mack et al. 2016, Roundy 2016) In contrast to these physical aspects, scholars completely understudied social and cultural characteristics of entrepreneurial environments, and underestimated as a result their possible impact. (Spigel 2015, Roundy 2016) Recently, scholars have begun to concentrate on the characteristics of social structures within entrepreneurial ecosystems and connections between ecosystems participants. (Motoyama et al. 2014) Research has focused particularly on the complexity and depth of networks and connections between entrepreneurs in the ecosystem. These cultural components may have an impact not only on the creation of the ecosystem, but also on its development and promotion. (Roundy 2016)
2.1.1 Ecosystem Models and Items
No specific variable completely describes the nature of a successful entrepreneurial ecosystem, but recent research has developed different models with various pillars important for successful environments.
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Feld developed several key attributes in his 2012 research on successful startup environments: (1) leadership, (2) intermediaries, (3) network density, (4) government, (5)
talent, (6) support services, (7) engagement, (8) companies and (9) capital. (Feld 2012)
The World Economic Forum suggested eight key pillars for successful entrepreneurial ecosystems: (1) accessible markets, (2) human capital/work, (3) funding and finance, (4)
support systems and mentors, (5) government and regulatory framework, (6) education and training, (7) major universities as catalysts and (8) cultural support. (Foster et al. 2013)
Startup Genome developed the Global Startup Ecosystem Report and Ranking 2017, a 150-page report about worldwide entrepreneurial ecosystems that includes around 10.000 startups. Eight key factors for the major success of startup communities were analysed: (1)
funding, (2) market reach, (3) global connectedness, (4) technical talent, (5) startup experience, (6) resource attraction, (7) corporate involvement and (8) founder ambition and strategy. (Gautier et al. 2017)
Each model highlights the role and importance of talented human capital, funding and cooperative support institutions for the growth of entrepreneurial ecosystems. Important factors for human capital are universities within the environment and access to the ecosystem for technically capable international talents. The environment must also offer a high density of supportive angel investors, seed investors, private equity investors and venture capital firms for risk capital and funding. Financing should be visible and accessible in all sectors of the ecosystem. (Feld 2012, Foster et al. 2013)
The process of how participants network, interpret, and communicate entrepreneurial activities within the environment remains understudied, although recent research started
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focusing on it. As mentioned before, entrepreneurial ecosystems are extremely complex systems with many inter-personal relationships and connections between the participants. However, scholars have not explored well the process of social interactions, even though the literature has cited the probable importance of these cultural factors. (Mack et al. 2016) Entrepreneurial narratives might spread values, knowledge, and beliefs of the ecosystem to form an ecosystem culture. (Roundy 2016) Therefore, it is important that the ecosystem offers high quality networking opportunities within a deeply connected community of entrepreneurs, investors, advisors and supporters. (Feld 2012, Foster et al. 2013)
As mentioned before, one important feature that successful ecosystems share is their access to knowledge, or smart human resources. Environments created and facilitated this characteristic by generation-long investments in education. Entrepreneurial narratives may have the power to attract knowledge to the ecosystem, circumventing the long-term investment process in education. Visible success stories are able to inspire young and ordinary people to become future entrepreneurs. This process has occurred in Silicon Valley, which is not only well educated, but also a magnet for ready-made entrepreneurs. (Isenberg 2010, Gill et al. 2014, Mack et al. 2016, Roundy 2016) Nevertheless, in recent years, Silicon Valley has lost its number one position in attracting talent to the ecosystem of Singapore. Startups, especially those in early stages, have problems accessing experienced talent. The same problem of talent attraction occurs in many other ecosystems, like Toronto, that have difficulty attracting technical and growth talent. (Gautier et al. 2017) This research will focus on how ecosystems can become magnets for young talent and smart human resources. There are examples of entrepreneurial ecosystems with poor resources, such as Israel, Taiwan, Iceland, Ireland, and New Zealand, which have created entrepreneurial environments based
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on human resources. This shows the importance of attraction creation for international talents. Taiwan, for instance, has managed to re-attract highly-educated international students to their community. (Isenberg 2010)
2.1.2 Role of Government
Also mentioned in these models is the impact of governments on the development of entrepreneurial ecosystems. Some research suggests that entrepreneurial activity begun by innovative entrepreneurs is always directly or indirectly facilitated by governments’ approaches to building successful ecosystem frameworks. (Isenberg 2010, Ramraj et al. 2012) However, most policymakers commit the common mistake of trying to copy and recreate a second Silicon Valley, failing to consider and focus on the core strengths of their existing ecosystem while trying to create an ideal environment. It is very difficult to tailor an entrepreneurial ecosystem that matches the existing local entrepreneurship’s dimensions, styles and climates. Nevertheless, by making this mistake, they create environments that do not fit to their own economies and ecosystem histories. (Isenberg 2010, Mack et al. 2016)
Most industry clusters within entrepreneurial ecosystems form their own direction independent of government actions. To prevent the aforementioned mistake of failed recreation, governments should allow and commit more to experimentation within the ecosystem rather than forcing environments in predetermined directions. They could solve this problem by analysing and scanning the ecosystem and continuously redefining the strategy around the existing environment. Entrepreneurial narratives can provide orientation within the ecosystem and help identify the most suitable direction for an ecosystem’s development. Governments should concentrate on breaking down cultural barriers, educating
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entrepreneurs and supporting success stories. Nevertheless, the private sector also plays an important role in the development of ecosystems. (Isenberg 2010) Contrary to Europe and Asia, where governments actively support the growth of startup communities, US policymakers trust the private sector to maintain the ecosystem’s growth. (Gautier et al. 2017) Universities, organisations, foundations, financiers and entrepreneurs should also create and support entrepreneurial education, conferences, research, and activities. (Isenberg 2010)
Furthermore, no effective formula exists for policymakers to create the perfect entrepreneurial ecosystem. The mentioned ecosystem models only provide factors for success, but no guidance for the execution. To fill this gap, Isenberg examined nine interesting instructions for creating successful entrepreneurial ecosystems in his research in 2010. His findings emphasize the importance of local conditions: (1) stop emulating Silicon Valley, (2)
shape the ecosystem around local conditions, (3) engage the private sector, (4) favour the high potentials, (5) get a big win on the board, (6) tackle cultural change head-on, (7) stress the roots, (8) don’t over-engineer clusters; help them grow organically and (9) reform legal, bureaucratic and regulatory frameworks. One interesting factor Isenberg suggests is “get a big win on the board”. Over-celebrating success within and outside the ecosystem composes
this strategy. Actors of the ecosystem should discuss success of growing startups, even in early stages, at events, conferences, awards, speeches, and interviews, since entrepreneurial success might facilitate structural change for entrepreneurial ecosystems. (Isenberg 2010, Roundy 2016) Based on Isenberg’s assumptions, I perceive the governmental support factor only as a passive aspect, since the ecosystem should have the freedom to grow organically.
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2.1.3 New Ecosystem Model
Using those models presented within recent literature, I have created my own model that encapsulates the most important pillars for successful ecosystems: (1) cooperativeness,
(2) smart human resources, (3) risk capital availability, (4) networking opportunities, (5) internationality, and (6) risk-taking willingness. I created this framework by analysing and
consolidating all pillars of the mentioned models, as shown in the table below.
Table 1: Ecosystem Success Factors
Pillars Feld (2012) Foster (2013) Genome (2013)
Cooperativeness 1, 2, 6, 8 4, 6, 7 5, 7
Smart Human Resources 5 2, 6, 7 4, 5, 6
Risk Capital Availability 9 3 1, 6
Networking Opportunities 3 4 3
Internationality 5 2 3
Risk-Taking Willingness 7, 8 8 8
For the pillar cooperativeness, I considered all aspects that could be helpful and supportive, including training, education, mentoring and cooperation. The pillar smart human
resources also includes educational considerations. The factor internationality considers
access to international talents. The pillar risk-taking willingness involves entrepreneurial activity and engagement. Risk capital availability and networking opportunities are self-explanatory. I intentionally excluded the pillar government involvement, since I support Isenberg’s theory that entrepreneurial ecosystems should grow organically by focusing on local strengths, and therefore government involvement that pushes the environment in a designed direction is not a success factor. (Isenberg 2010)
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The entrepreneurial ecosystem of Amsterdam belongs to the top 20 entrepreneurial ecosystems worldwide. In the recent Global Startup Ecosystem Report and Ranking 2017 by Startup Genome, Amsterdam was ranked 19th. Although three new ecosystems entered this year’s top 20, Amsterdam maintained its ranking. For its comparably small size, Amsterdam’s ecosystem is quite successful, with estimated 2.300 – 3.500 tech startups in 2016/2017. The report ranked Amsterdam seventh in startup output and exit values. The number of “first of
its kind” innovations is also above the world average. (Gautier et al. 2017) A key factor to
Amsterdam’s success, despites its size, is its labour productivity, which is defined as the capacity to create new value per hour. This measurement has grown steadily in the Netherlands for decades, and is one of the highest in the world. (Stam 2014)
Amsterdam is known as an attractive ecosystem for tech talent, international founders, and investors. The environment, for instance, houses the European headquarters for several international tech companies, including Netflix, Tesla, Uber and Optimizely. (Stam 2014, StartupDelta 2017) Amsterdam’s ecosystem has also created its own ventures, such as WeTransfer, Booking.com and Adyen, the first fintech unicorn (valued at over $1 billion). In addition to startups, over 27 incubators and accelerators are located within the ecosystem. Two of Europe’s best accelerators, Rockstart and Startupbootcamp, were founded in Amsterdam. Furthermore, the ecosystem has over 50 workspaces for startups, including the internationally known workspaces WeWork and rent24. (I am startup 2017, StartupDelta 2017) The high density of success within the Amsterdam’s startup environment suggests there may be a huge foundation that creates and spreads entrepreneurial success stories within the ecosystem.
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Amsterdam’s environment is known for its excellent education system and high rate of fluent English speakers. Over 100.000 students attend the three biggest universities of Amsterdam. (StartupDelta 2017) Some startup founders came to Amsterdam for personal reasons, because it is a beautiful city and considered a European hotspot. The Netherlands also stand up with one of the highest self-employment rates, which grew enormously during the 2000s. This clearly separates the Netherlands from other countries as a leader in self-employment and demonstrates the density of entrepreneurial activity. (Stam 2014)
Past research connected a high rate of entrepreneurial activity to a low aversion for founding ventures and for possible failures. (Isenberg 2010) To increase entrepreneurial activities, the Dutch government created the Amsterdam-StartupDelta to connect all actors within the entrepreneurial ecosystem. As a combination of hub and accelerator, the StartupDelta encourages access to talent, capital, networking, knowledge and markets. Dutch policymakers support strongly the StartupDelta, which created an environment with favourable tax laws, startup visas and further interesting initiatives and policies. The StartupDelta itself cites eight specific incentives for Amsterdam’s ecosystem: (1) strategic
location, (2) international business climate, (3) superior infrastructure, (4) competitive fiscal climate, (5) multilingual workforce, (6) creative and innovative environment, (7) exceptional quality of life and (8) Europe’s most connected startup ecosystem. (StartupDelta 2017)
However, according to the Genome startup report, Amsterdam’s ecosystem has deficits in access to funding and talent. The performance of Amsterdam’s ecosystem is ranked 10th,
but the characteristics for funding and talent are ranked only 17th and 18th globally. The
factors, amount of experienced software engineers and experienced growth employees, caused the low score of the second criterion. Amsterdam is below the global average in both
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categories. (Gautier et al. 2017) Furthermore, the number of people who know an entrepreneur in the Netherlands has remained almost constant and only increased from 30% in the 2000s to 35% in recent years. Nevertheless, this knowledge rate of entrepreneurs and startups is one of the highest compared to other countries. (Stam 2014)
2.3 Entrepreneurial Narratives
Recent literature examined entrepreneurial narratives in their structure and function. (Roundy 2016) This research focuses on the function part of entrepreneurial narratives, which are defined by four main categories on an individual level. Recent literature characterized these functions as sense making, identity construction, legitimacy and attention creation. (Bruner 1991, Brown 1998, Golant et al. 2007, Brown et al. 2008, Down 2008, Denning 2008, Abolafia 2010, Clarke et al. 2010, Gill et al. 2014) Entrepreneurial narratives are important for this research, because through narratives, entrepreneurs create a tool to communicate about their ventures and influence others’ understanding of their actions. (Abolafia 2010) The mentioned functions might also have an impact on entrepreneurial environments. Therefore, this study will examine these functions on an ecosystem level. Recent literature has already created a link between the functions of entrepreneurial narratives and symbolic language and described it as entrepreneurial storytelling. Entrepreneurial stories can be very important for venture creation and for growth, and stories told by and about entrepreneurs can be especially supportive in acquiring the resources necessary to generate wealth. (Lounsbury et al. 2001, Martens 2007) The process of storytelling might also have an impact on the entrepreneurial ecosystem through ecosystem stories. Indeed, this is why a detailed look at narrative structure and narrative functions is significant. People can communicate and
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transport narratives in both, writing and oration, through newsletters, media, office talk or discourse at events. (Roundy 2016) This research will focus on the oral transportation of entrepreneurial narratives. It is also important to note that narratives can contain fictional stories created from imagination. (Appell 1989) This can be the case when entrepreneurs employ narratives for marketing reasons. Entrepreneurs can create their own fictional stories to spread false narratives in their favour, but narratives also represent experiences and actions taking place in the real world. Separating fictional from real narratives is even more difficult in an ecosystem level, since individual narratives together create a collective story that might mixes fictional and real-world components. (Bruner 1991, Roundy 2016)
2.3.1 Structure
One part of narrative research is the structure. Entrepreneurial narratives have a temporal order: beginning, middle and end. They also have a plot, or in other words, a theme, that explains certain events, actions and opinions. (Landa et al. 2014) With this structure, narratives are able to create meaning through stories, a phenomenon that the function section will explain. (Roundy 2016) The specific structure of narratives is not of further interest for this research.
2.3.2 Functions
A characteristic used to define narratives is their function, which focuses on their purpose and how they are used. This research focuses on four functions defined in recent literature: sense making, attention increasing, identity and legitimacy creation. (Bruner 1991, Lounsbury et al. 2001, Golant et al. 2007, Down et al. 2008, Brown et al. 2008, Denning 2008,
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Clarke et al. 2010, Roundy 2015) The creation of identity and increase of attention will be particularly important in this research. All of these functions are great tools for entrepreneurs to increase the chance that resources will flow to their venture. (Martens et al. 2007) It is also important to understand how entrepreneurial narratives function at the entrepreneurial ecosystem level, which this study will examine later.
2.3.2.1 Sense Making
Sense making, or sense giving, is one of the primary functions of narratives. Narratives can influence the formation of one’s understanding and give other individuals an understanding of a certain subject. (Brown 1998) Entrepreneurial narratives are a key process used by entrepreneurs to form the understanding of a venture or an entrepreneur’s vision. (Abolafia 2010) Particular stories are able to create meaning for the entrepreneur and the environment by collecting and separating events and experiences. (Roundy 2016)
2.3.2.2 Identity
Important for this research is the creation of identity through entrepreneurial narratives. Narratives collect and link individual experiences and actions from the past or present and create a coherent whole and construct an entrepreneur’s identity. (Bruner 1991, Down et al. 2008, Brown et al. 2008, Clarke et al. 2010) Recent literature adopted this process for group events, actions and experiences, and therefore it plays a critical role in studies about entrepreneurial ecosystem narratives. (Gill et al. 2014, Roundy 2016)
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2.3.2.3 Legitimacy
Past literature connected the generation of identity with the function of legitimacy creation, which Suchman defined as “generalized perception of assumption that the actions
of an entity are desirable, proper or appropriate within some socially constructed system of norms, values, beliefs and definitions.” (Suchman 1995: 574) Entrepreneurial narratives create
legitimacy by influencing the perceived believability of entrepreneurial identities through storytelling. The legitimacy of values, beliefs and definitions of social systems subsequently leads to the legitimacy and identity creation of entrepreneurial ecosystems. (Gill et al. 2014, Roundy 2016)
2.3.2.4 Attention
Another function of narratives is the ability to capture and hold recipients’ attention. This ability is created through characteristics of narratives, such as the use of inspiring emotions and imagery in a variety of contexts. (Denning 2008) In particular, the success stories of entrepreneurs or ecosystems are capable of garnering great attention. (Deephouse 2000) By highlighting qualities and success, created attention can attract outside resources. (Roundy 2016)
2.3.3 Extraversion
According to past research, human characteristics, like extraversion, influence the creating and spreading of narratives. (McLean 2006, Hirsh 2009) I concentrate on the characteristic extraversion because it is one of the more social focused characteristics within the five-factor model of personality. (Digman 1990) Extraverted people are more comfortable
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sharing narratives than less extraverted ones and therefore share stories more often and with more people. (McLean 2006, Hirsh 2009) Extraversion might increase and affect the frequency of entrepreneurial narratives within an entrepreneurial ecosystem. It is also related to positive feelings, emotions, sociability and openness, and could, as a result, affect the creation and perception of success stories. Cultural differences within entrepreneurial environments might influence the density of extraverted actors. (McAdams 2004, McLean 2006, Hirsh 2009)
2.4 Entrepreneurial Ecosystem Narratives
This research focuses on entrepreneurial narratives within entrepreneurial ecosystems. Processes and functions of narratives that operate on an individual level might also function at the ecosystem level. (Roundy 2016) This section will examine recent literature about the role of entrepreneurial narratives in entrepreneurial ecosystems. Research defines these types of narratives as entrepreneurial ecosystem narratives. (Roundy 2016) Entrepreneurial narratives collect the events, actions and experiences of individuals and form them into a coherent whole. (Bruner 1991) This leads to coherent groups of entrepreneurial narratives perceived as narratives about entrepreneurial ecosystems. (Roundy 2016)
Research has understudied how participants of ecosystems communicate within and about entrepreneurial ecosystems and how they perceive discourse within these complex systems. (Roundy 2016) Entrepreneurial research and narrative approaches have shown the important role of narratives in entrepreneurship, but it is still unclear how they function in ecosystems. Recent literature hints that narratives may affect entrepreneurial ecosystems by supporting wealth creation and attracting resources. However, research has not proven empirically this effect and it is unclear what level of impact this certain factor may have.
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(Martens 2007, Roundy 2016) Some suggest that it is easier to identify the relationship between entrepreneurial stories and wealth creation in environments that have strong entrepreneurial activity. (Lounsbury et al. 2001)
2.4.1 Types
Recent research theorised the role of entrepreneurial narratives within the creation and development process of entrepreneurial ecosystems. Roundy defined three types of entrepreneurial ecosystem narratives with four main functions, which this section will examine and discuss. The three entrepreneurial ecosystem narratives are future-oriented
narratives, historical accounts and success stories. This research will mainly focus on success
stories. (Roundy 2016)
2.4.1.1 Future-Oriented Narratives
Entrepreneurial ecosystem narratives are able to describe possible future events and not only past or present happenings. They can explain major future initiatives planned by community members. (Barry et al. 1997, Bode et al. 2013) By collecting participants’ visions, they can portray the possible direction the ecosystem will take. This might also work the other way around. Future narratives of the ecosystem are able to influence participants while forming their visions. (Roundy 2016)
2.4.1.2 Historical Accounts
Historical accounts are entrepreneurial narratives about key events and activities in the ecosystem’s past. (Parry 1997) These narratives can be about early entrepreneurs or ventures that played an important foundational role within the ecosystem’s community and
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environment. They can explain how entrepreneurship played a role in the creation and development of the ecosystem. (Vaara 2002) Their stories can form an ecosystem’s identity and highlight characteristics of the environment. (Gill et al. 2014, Mack et al. 2016, Roundy 2016) Therefore, I treat this type of ecosystem narrative as a historical sub-type of success stories within this research.
2.4.1.3 Success Stories
Entrepreneurial ecosystem narratives can describe past and present success within the ecosystem. (Vaara 2002) Recent research has shown that narratives are able to highlight the actions of individual entrepreneurs as success within the ecosystem and, therefore, leverage it on the ecosystem’s success. (Spigel 2015) Entrepreneurial success stories concentrate not only on individuals, environment participants might perceive them as general ecosystem success. (Roundy 2016) Since success stories are the main factor within this study, the next sub-chapter will describe them in detail.
2.4.2 Functions
Although past work has hinted at the possible impact of entrepreneurial narratives on entrepreneurial ecosystems, scholars explored not well the functions of narratives to create and develop startup environments. (Roundy 2016) Recent literature suggests the impact of narratives on technological, financial, human and intellectual capital, which is beneficial for the ecosystem and for individual entrepreneurs in a circular relationship. (Lounsbury et al. 2001) Nevertheless, Roundy has defined six concrete functions of entrepreneurial ecosystem narratives in his recent research. However, no study has proven empirically these assumptions
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so far. Research suggests that functions at the individual level also work and operate on the ecosystem level. This section explains the following functions: attention seeking, future
shaping, sense making, transmitting culture, identity creation and legitimacy creation.
(Roundy 2016)
2.4.2.1 Attention Seeking
An important function of entrepreneurial ecosystem narratives is the possible creation of attention for ecosystems. (Denning 2008, Isenberg 2010) By creating attention for entrepreneurial activities, entrepreneurial ecosystem narratives inspire possible future entrepreneurs to start their own ventures. (Feld 2012, Spigel 2015) They spread successful entrepreneurial activity within and outside the ecosystem, creating attention and attraction to the environment. (Deephouse 2000, Spigel 2015, Roundy 2016) Generally, these stories raise attention to the opportunities of entrepreneurship within the ecosystem. They can also raise attention outside the ecosystem and function as magnets for resources such as financial and human capital. (Isenberg 2010) Especially in the early development of stage of ecosystems, when they are still unknown, the creation of entrepreneurial narratives can be crucial to ecosystem development. Creating strategic attention for an external audience can establish a competitive advantage against other ecosystems. (Lounsbury et al. 2001)
2.4.2.2 Future Shaping
Narratives can shape the future of entrepreneurial environments. (Barry et al. 1997) Entrepreneurial discourse could spread the assumption that a specific technology will be important in the ecosystem’s future and as a cause, ecosystem participants might concentrate
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on this technology. (Roundy 2016) The future shaping function of narratives can also have a negative side effect that leads to a phenomenon known as “discursive closure.” (Leonardi et al. 2004) “Discursive closure” occurs when participants focus only on a specific future shaping narrative and miss other narratives and opportunities, which leads to a blind spot in planning and decision-making. (Roundy 2016)
2.4.2.3 Transmitting Culture
Research has focused on narratives in order to identify how community participants spread values and knowledge within ecosystems. (Roundy 2016) Narratives can transfer values, knowledge and beliefs through discourse among participants. (Doney 1998, Srinivasan 2004, Isenberg 2010) Narratives create means through which participants of the ecosystem gain access to the rules and norms of the environment. If an entrepreneur is new to the ecosystem and he perceives stories about successful cooperation between ventures, he will understand collaboration and cooperation is highly valued and part of the ecosystem’s identity. (Roundy 2016) Gatekeepers are an important transport factor for narratives within the ecosystems, since they judge the credibility of narratives and spread them through the community. (Eccles et al. 1988)
2.4.2.4 Sense Making
By acting as carriers of values, narratives help participants understand the ecosystem’s values and make sense of a common behaviour. (Brown 1998, Abolafia 2010) Recent literature connected the sense-making function of entrepreneurial ecosystem narratives with identity and legitimacy creation. The communication of values might affect the identity of the ecosystem. Entrepreneurial ecosystem narratives have to be understandable to create an
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identity or legitimacy; otherwise, stories would not affect how participants and actors from outside see the ecosystem. The process of exchanging values and knowledge through narratives creates the culture and sense of an ecosystem. (Srinivasan 2004, Roundy 2016) It is important that stories make sense for gatekeepers with influence and resources, such as venture capitalists and accelerators. If gatekeepers understand a story, they can forward it and exact a huge impact in the ecosystem. (Lounsbury et al. 2001)
2.4.2.5 Identity Creation
Entrepreneurs from outside an ecosystem or new participants within the ecosystem may not understand the ecosystem’s identity from the beginning. However, when an ecosystem participant receives many collaboration narratives, he may perceive the identity of the ecosystem as cooperative. (Brown et al. 2008, Down et al. 2008, Roundy 2016) Recent literature connected the ecosystem’s identity to the legitimacy of the environment. If participants receive a cooperative identity, they might accept to cooperate with other actors in the environment. (Golant et al. 2007) This example can be carried forward to other possible characteristics of ecosystem identities. For instance, environment stories about successful startup funding create an identity for risk-capital access and narratives about international talent create an identity for internationality. Identity creation at the ecosystem level and identity creation at the individual level are two-way correlated. The possibility for an entrepreneur to create his identity through individual stories might depend on the ecosystem narratives and the other way around. If an ecosystem is not known for its internationality, it is much harder for an entrepreneur to create an international identity. (Clarke et al. 2010, Ramraj et al. 2012, Gill et al. 2014, Roundy 2016)
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2.4.2.6 Legitimacy Creation
The creation of legitimacy can influence an ecosystem’s ability to attract resources and, therefore, is very important. As mentioned before, legitimacy is “framing the unknown in such
a way that it becomes believable.” (Aldrich et al. 1994: 651) When an ecosystem attracts
resources, entrepreneurs within the ecosystem have better access to said resources, which in turn makes the environment more attractive for startups. (Lounsbury et al. 2001, Golant et al. 2007) Some ventures can only access resources because of the legitimacy of the ecosystem, as mentioned by the Hotmail entrepreneur Sabeer: “Only in Silicon Valley could two
twenty-seven-year-old guys get three hundred thousand dollars from men they had just met.”
(Bronson 1999: 85) Especially in the beginning of an ecosystem, legitimacy can increase the founding rate of new ventures started by entrepreneurs. (Aldrich et al. 1993, Ramraj et al. 2012) If a new developed ecosystem spreads narratives of its cooperation with a successful established environment, it might create legitimacy for itself in a process that Nahapiet describes as “borrowing reputation from elite ties”. (Nahapiet et al. 1998) It is important to separate the “strategy-as-story” approach from the function of legitimacy, which tries to make the unfamiliar familiar and understandable. The “strategy-as-story” approach is a marketing approach that tries to make the familiar unfamiliar by making it look new and unique for consumers. (Lounsbury et al. 2001, Clarke et al. 2010)
2.4.3 Research Outlook
This research focuses on entrepreneurial success stories and their functions: attention
seeking and identity creation. Literature has shown that success stories may have a
surprisingly strong effect on the entrepreneurial ecosystem. (Isenberg 2010, Feld 2012, Spigel 2015, Mack et al. 2016, Roundy 2016) Entrepreneurial success stories might strengthen the
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ecosystem’s ability to attract resources, including risk capital or educated human resources, by creating identity and legitimacy for the environment. Those wishing to strengthen the environment should promote constructing and spreading of success stories, as they do for physical components of ecosystems. This includes policymakers and the private sector. (Roundy 2016) If success stories have a positive impact on entrepreneurial ecosystems, as explained, the existence of networking events, incubators, accelerators and other networking opportunities is important, to bring ecosystem participants together to exchange narratives through discourse. The theory framework suggests that ecosystems with well-developed success stories more easily attract resources than ecosystems with less developed narratives. (Roundy 2016)
2.5 Success Stories
In order to understand the assumptions, this section defines the characteristics of entrepreneurial success stories and of the perception of success. In his 2012 study, Feld explains that entrepreneurial success stories are narratives about successful local entrepreneurs. His assumption identifies entrepreneurs as successful if they become market leaders. (Feld 2012) Examples of success stories can focus on significant exits or the successful allocation of resources, as in an investment round. They can also describe ventures with important innovative technologies or with particularly creative entrepreneurs. More generally, success stories can also describe the success of the ecosystem. (Roundy 2016) Literature suggests that even a modest success story can have an impact on the environment. (Spigel 2015) There are various profitability and non-financial measurements for entrepreneurial success. (Lucky et al. 2011) One measure for startups is profitability, but
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people perceive startups as successful even though they have not yet generated profits, for example, Uber. Therefore, profitability might not be a good measurement for ecosystem participants’ perception of success stories. Non-finance measurements suggested by recent literature include (1) remained open for business, (2) hired more employees, (3) expanded
facilities, and (4) experienced growth. (Eschker et al. 2017) In this case, success could be
perceived as expansion in number of employees, opening new offices or general venture growth. Some people perceive even the achievement of not going bankrupt as a startup as success. (Eschker et al. 2017) Stories about successful entrepreneurs can inspire future entrepreneurs to take the risk of starting their own company and attempting the same success journey. (Feld 2012, Spigel 2015)
Early and visible success particularly reduces the perception of entrepreneurial risks and barriers to founding a venture and instead presents possible rewards by executing an entrepreneurial opportunity. Therefore, success stories are important for spreading entrepreneurial activities. (Vaara 2002, Spigel 2015, Roundy 2016) Just one success within the entrepreneurial environment can have a surprisingly strong effect on the ecosystem by inspiring entrepreneurial imitators and the imagination of the public. (Ramraj et al. 2012) Isenberg calls this effect the “law of small numbers”. (Isenberg 2010) In his research in 2012, Feld cited “stories of successful local entrepreneurs who found startups that go on to become
large, global market leaders that might serve to inspire younger entrepreneurs to undertake similar journeys.” (Feld 2012) Success stories can have the power to strengthen
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2.5.1 Examples
The Kenyan government and the case of KenCall are a good example of the possible impact of success stories on entrepreneurial environments. Policymakers in Kenya did not wait for KenCall to become a big success. In an early growth stage, the speed of growth was already reason enough to promote the success story of the company at international conferences and in publications. This early success story improved the structure of the environment by supporting a new undersea fibre link, the first of its kind in East Africa. (Isenberg 2010)
There are more examples mentioned in recent research that illustrate the influence of single success stories on their environment. For example, Skype’s growth story and the $ 2.6 billion exit to eBay inspired highly trained people in Estonia to start their own company. In China, the success story of Baidu’s market share inspired a whole generation to become entrepreneurs. Furthermore, Celtel’s success story in Africa, with an exit of $ 3 billion, changed investors’ negative perceptions of Africa’s entrepreneurial image and opened new possibilities for risk capital. Both success stories of companies and successful entrepreneurs can inspire an environment. (Isenberg 2010)
Entrepreneurship is risky, but people still find success. One example is the Saudi entrepreneur Al-Munif, who now inspires other Saudi entrepreneurs during seminars with his bravery. He became a successful entrepreneur even without connections, capital or technology. Another example is Ireland, where bankruptcy was proscribed and a no failure acceptant culture is pervasive, allowing only a few people to dare to take the risk and start a venture. Through successful entrepreneurs and their emerging success stories, hundreds of new tech companies suddenly started in Ireland. (Isenberg 2010) The same happened in Chile,
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where people were also risk averse. However, newspapers interviewed successful entrepreneurs and exposed people to success stories. Consequently, people began wondering how and why entrepreneurs were successful. (Isenberg 2010) One further example is Puerto Rico, where local news agencies began a weekly section about entrepreneurial success stories in their newspaper. (Isenberg 2010) These success stories became part of daily conversations as people became aware of the possibilities entrepreneurship offers. These are only a few examples of success stories in recent literature and their potential effects on entrepreneurial ecosystems. There are many more examples, but as these already show, a demonstrable connection between success stories and entrepreneurial ecosystems exists. (Isenberg 2010)
2.6 Propositions
After examining and analysing the literature review, I concluded with six propositions for the following qualitative and quantitative research:
(1) Amsterdam’s entrepreneurial ecosystem is perceived as a perfect environment
with all required pillars for success, including cooperativeness, smart human resources, risk capital availability, networking opportunities, internationality and risk-taking willingness.
(2) Entrepreneurial narratives in form of success stories affect the access to human
and financial resources within entrepreneurial ecosystems by improving the attraction of ecosystems for talented human resources and institutions with risk capital.
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(3) Entrepreneurial narratives in form of success stories positively influence the
perception of entrepreneurial ecosystem identities.
(4) The perception of entrepreneurial ecosystem identities affects the attraction of
human and financial resources for entrepreneurial environments.
(5) Cultural characteristics, like extraversion of ecosystem participants, affect the
circulation processes of entrepreneurial success stories within the entrepreneurial ecosystems, the perception of the identity and the attraction to the ecosystem.
(6) Amsterdam’s entrepreneurial ecosystem has a great foundation for
entrepreneurial success stories. Therefore, the density of success stories within Amsterdam’s environment should be high.
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3 Research Design
This chapter explains the research design, including the conceptual framework, the hypothesis and the mixed methodology divided into qualitative and quantitative parts. The observations of this research contain only data from the entrepreneurial ecosystems of Amsterdam and Hamburg between May and June of 2017.
3.1 Conceptual Framework
As shown in the literature review, the concept of entrepreneurial ecosystem narratives originates from theories about entrepreneurial narratives and entrepreneurial ecosystems. The conceptual framework of this research focuses on the connection between entrepreneurial narratives and entrepreneurial ecosystems, which is an understudied social factor of entrepreneurial ecosystem theory. (Motoyama et al. 2014, Spigel 2015, Roundy 2016). The framework suggests that entrepreneurial narratives possess comparable functions for entrepreneurial ecosystems and entrepreneurs at the individual level. As described in the literature review, there are different types and functions of entrepreneurial ecosystem narratives. This research focuses on success stories and the connection to the functions of ecosystem identity creation and attraction generation. The theory framework and the propositions lead to the following conceptual model.
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Figure 1: Conceptual Framework
3.2 Research Hypotheses
H1: Frequency of success stories has a positive effect on the attraction to
ecosystem.
H2: Frequency of success stories has a positive effect on the perception of
ecosystem’s identity.
H3: Perception of ecosystem’s identity has an effect on the attraction to ecosystem.
H4: Extraversion affects the frequency of success stories, the perception of
ecosystem’s identity and the attraction to ecosystem.
3.3 Mixed Methodology
This research uses a mixed methodology to improve the research outcome, since a single method cannot answer the research question, the propositions and the hypothesis as a result of the complexity of entrepreneurial narratives at an entrepreneurial ecosystem level. The study explores questions on both an individual and group level. Furthermore, the research examines the phenomenon of entrepreneurial ecosystem narratives on a regional and
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transnational level for generalization. (Morse et al. 2016) I chose a qualitative research strategy, since various actors interpret and perceive success stories differently and subjectively. (Martens et al. 2007) Additionally, I conducted a quantitative research approach to generalize the study’s findings.
I collected qualitative and quantitative data through interviews in Amsterdam’s entrepreneurial ecosystem and through surveys in Amsterdam’s and Hamburg’s startup environments. The research employed a descriptive approach. After setting up a theoretical framework with past and recent literature, the assumed connections were examined in interviews and tested through a survey. I chose Amsterdam as a case for interviews because the city environment has an abundant entrepreneurial presence. (Gautier et al. 2017) As mentioned before, it may be easier to discover and examine entrepreneurial narratives in ecosystems that support entrepreneurial activities. The startup environment of Hamburg was chosen for the quantitative research to increase the variance of results. Recent research suggested that an examination of more than one entrepreneurial environment would be beneficial in investigating the possible effects of success stories. (Roundy 2016) Hamburg seemed to be a good choice for diversification, since it has not been mentioned in any startup environment rankings and therefore should have a less developed ecosystem.
3.3.1 Qualitative Research
For the qualitative research component, I conducted semi-structured interviews with a cross-section sampling of participants in Amsterdam’s startup environment. (Martens et al. 2007) To get a general perspective on Amsterdam’s entrepreneurial narratives, a cross-section sampling design with different participants of the startup environment was necessary. I
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interviewed entrepreneurs, startup employees, managers of business incubation facilities and participants of community events. I used semi-structured interviews, since various groups within the ecosystem might have different characteristics and different perceptions of success stories.
For the qualitative analysis strategy, I combined a deductive and inductive approach. The deductive approach created the basic framework, which was tested in interviews. The inductive approach was used to discover new aspects. To realise my analysis strategy, I employed the mechanical system NVivo 11 for support. Furthermore, I concentrated on two principles during my qualitative analysis, to support the inductive part and to ensure high quality through the entire work.
1. Be observant at any time for the inductive approach. Always allow new ideas
and themes to emerge and look for the unexpected.
2. Follow systematic processes throughout the analysis. Always use the same steps
throughout the whole analysis to secure a high level of quality.
First, in a deductive approach, I analysed the transcribed interviews with NVivo 11. I took the theory framework as a basis for the creation of themes and sub-themes from the literature. In a second step, I created units of data by coding complete sentences and paragraphs in the associated themes. I used coloured highlighting to label each sentence and paragraph to increase the overview of the coding. After all individual codes were summarized into suitable themes, I considered the notes to analyse the coded sentences and paragraphs. I searched for new ideas and words within the themes to create new sub-themes. This was already part of the inductive approach.
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I conducted an inductive approach in parallel to the deductive method. Following the main deductive approach, I looked again at the overall data and examined it for sentences and ideas that did not fit my prepared notes. Since this approach was inductive, I used sentences, instead of paragraphs, for coding. I found new ideas during the inductive approach that inspired new sub-themes.
Finally, I analysed the themes and sub-themes and examined the connection between these nodes. I constructed findings from the codes to describe my ideas. In a later discussion, I will reveal the relationships between these findings. Additionally, I used direct quotes to support my ideas and conclusions. With the described procedure, I was able to examine coherencies and identify interesting aspects about Amsterdam’s entrepreneurial ecosystem and its success stories.
3.3.2 Quantitative Research
As mentioned before, the research employed a deductive approach to investigate the connection between success stories and entrepreneurial ecosystems. The quantitative research is the second component of this mixed method exploratory study with the rationale “confirm and discover.” (Harrison 2013) The timing of the research was sequential, as the qualitative research was conducted prior to the quantitative research. A combination of recent literature and qualitative research delivered variables and items for the quantitative component. The qualitative research also delivered a possible positive relationship between the perception of ecosystem identities and attraction to the ecosystem, which was tested empirically in the quantitative analysis.
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3.3.2.1 Sample
For the quantitative research, I chose Amsterdam as a sample location for comparability reasons, since the qualitative part was already conducted in this environment. Furthermore, the entrepreneurial ecosystem in Amsterdam offers a high density of entrepreneurial activities, which might be helpful to analyse entrepreneurial success stories. (Gautier et al. 2017, I am startup 2017) To increase the variance in the variables and test the reliability of the research, I conducted the same survey in Hamburg’s startup environment. Hamburg was chosen because its ecosystem seemed to not be as successful as Amsterdam’s environment and therefore might offer variance in its narratives, performance and development. (Roundy 2016, Gautier et al. 2017)
Since entrepreneurial narratives are interpreted subjectively, it was necessary to have a cross-section sampling design with different participants in the entrepreneurial ecosystem to generate a general perspective. (Martens et al. 2007) I considered all participants within Amsterdam’s and Hamburg’s entrepreneurial environments, including entrepreneurs, startup employees and supporting institutions, to be populations of interest for this research. The sampling frame was unknown, since there were no specific and accessible databases of startup employees and entrepreneurs within these two ecosystems.
I chose a non-probability convenience sample and analysed the sample through information about the industry of participants (E.g. tech, creative, finance, fashion, travel, food
and other) and the time they had belonged to the ecosystem (E.g. moved to Amsterdam less than one year ago). I reached the participants through startup events, personal emails,
personal social media messages and specific social media groups. I attempted to contact as many participants as possible, at least 50 participants for each environment. The response
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rate is difficult to estimate because participants were reached also through social media groups. Nevertheless, I assume the response rate averaged around 20-30%, since over 300 people were contacted individually and 100 people responded.
3.3.2.2 Measures
The dependent variable attraction to ecosystem was measured by an adapted version of the 4-items variable attraction to firm with a 5-point Likert scale from Turban, Chung-Ming and Hang-Yue Ngo (2001) with a Cronbach’s alpha of 0.90 (E.g. I would like to work in this
ecosystem). (Appendix 1)
The independent and dependent variable perception of ecosystem identity was measured using a 10-item scale created through recent literature and the study’s qualitative research, which suggested three additional factors for a successful ecosystem: innovativeness,
creativity and failure acceptance. Furthermore, I added the item networking quality, since the
qualitative analysis assumed a lot of networking, but few exchanges of narratives. I used a modified 5-point Likert scale with questioning from Rothbard and Wilk (2011). A Cronbach’s alpha of 0.801 was estimated for this scale. (E.g. Using the scale below, please indicate how
Amsterdam’s startup environment seems to you... Innovative). (Appendix 2)
The independent variable extraversion was measured with an 8-item scale created by Church, Cheryl and Prado (2008) in combination with a 5-point Likert scale. Since this scale was used in different countries, Cronbach’s alpha ranged from 0.62 to 0.88. (E.g. Using the
scale below, please indicate how you see yourself… Talkative). (Appendix 3)
The variable frequency success stories and networking was measured with an adopted 3-item question by Kacmar, Gully, and Zivnuska (2003) and a 5-point Likert scale. The original
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4-item scale had a Cronbach’s alpha of 0.85. For the adapted scale, I estimated a Cronbach’s alpha of 0.658. (E.g. Using the scale below, please indicate the frequency… How often do you
hear success stories?). (Appendix 4)
Additionally, all respondents were asked about their industry (nominal variable), the time they had belonged to the ecosystem (nominal variable) and if they had heard any success stories in general (nominal variable).
