University of Amsterdam Faculty of Economics and Business
Master Thesis MSC Business Studies
The influence of incubator’s resources overcoming new ventures Liability of newness
Chantal van Kempen 10668527
August 15th 2014 First supervisor: M. Kackovic
2 Abstract
Many researchers have focust on the liabillity of newness on new ventures and there is also extensive research about the relationship between incubators and new ventures. What is not yet clear is if the resources incubators offer can help to overcome the liabillity of newness. The aim of this thesis is to examine the relationship between the resources an incubator can provide and the influence this can have on overcoming liability of newness for new ventures. Empirical data is obtained qualitatively through 16 semi structured interviews in two different incubators. The findings of the research show that some resources directly influence liability of newness of new ventures but most resources have an indirect effect on the liability of newness trough the
incubator members. Incubators have an influence on the three elements of liability of newness. By organising informal activities the incubator facilitates the possibility of networking and cooperation and creates strong social ties. Offering an accessible and informal environment the incubators stimulate learning among members and improve the knowledge and expertise of the incubator. The brand name and image of the incubator reflects on the respondents in the incubator which increase the reliability and accountability. These resources are all available in the incubator but it is up to the tenants to use this opportunity.
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Table of content
Abstract ... 2
1. Introduction ... 5
1.1 Motivation and Discussion ... 5
1.2 Research methodology ... 9
1.4 Structure ... 10
2. Theoretical framework ... 11
2.1 Liability of newness ... 11
2.2 Undeveloped social ties ... 13
2.3 Lack of accountability and reliability ... 13
2.4 Lack of (learning) experience ... 15
2.5 New ventures ... 16
2.6 Incubators ... 17
2.7 Resource based view. ... 18
3. Propositions ... 20
4. Research methodology ... 22
4.1Research design and strategy ... 22
4.2 Samples ... 23
4.3 Data Collection. ... 25
4.4 Questions of the semi-structured interviews ... 26
4.5 Quality of the research ... 28
4.6 Method of analysis ... 29
5. Results ... 31
5.1 Offered resources by incubators ... 31
5.1.1 Human resources. ... 32
5.1.2 Tangible resources. ... 35
5.1.3 Intangible resources. ... 36
5.2 Influence of incubator resources on the lack of social ties. ... 38
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5.4 Influence of incubator resources on the lack of learning experience. ... 40
5.5 Summary of findings ... 42
6. Discussion and conclusions ... 45
6.1 Discussion and evaluation ... 45
6.2 Practical Implications ... 50
6.3 Limitations and recommendations for future research ... 51
6.4 conclusion ... 52
References ... 53
Appendix 1 Questionnaire semi structured interviews. ... 60
Appendix 2 Interview Kars Alfrink ... 62
Appendix 3 Interview Joanne Voorberg ... 66
Appendix 4 Interview Erwin Elling ... 70
Appendix 5 Interview Jet van Zwieten ... 76
Appendix 6 Interview Eva Leffef ... 85
Appendix 7 Interview Rob Verbakel... 88
Appendix 8 Interview Marieke Kitzen ... 92
Appendix 9 Interview Maartje Schenkels ... 97
Appendix 10 Interview Josine van der Voort ... 101
Appendix 11 Interview Ton Savenije ... 106
Appendix 12 Interview Sija van Maurik. ... 109
Appendix 13 Interview Marjolein jongerling ... 113
Appendix 14 Interview Neeltje ten Westenend ... 115
Appendix 15 Interview Aartjan Hullink ... 119
Appendix 16 Interview Remco Janssen ... 121
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1. Introduction 1.1 Motivation and Discussion
Extensive research has been done about the reason new ventures fail (Aldrich and Fiol, 1994; Delmar and Shane, 2004; Pollack, Rutherford and Nagy, 2012). Freeman, Carroll and Hannan (1983) state that the first few years of operation are crucial because during these years new ventures are most likely to fail.
One specific theory on this reason for failure is that of Stinchcombe (1965), who reasoned that new ventures suffer from something called the “liability of newness”. This theory states that new ventures have a distinct disadvantage in comparison with established ventures, resulting in their increased failure rates. The liability of newness theory states that there are three main reasons new ventures are incapable of competing effectively with established ventures: they suffer from a lack developed social ties, a lack of reliability and accountability and a lack of learning experience (Stinchcombe, 1965).
According to Stinchcombe (1965) new ventures do not possess developed social ties with customers and suppliers. These social ties are important as they give ventures access to the resources they need to produce their goods and services. On top of this, these social ties are a basis for trust and familiarity with the venture and its processes (Abatecola, Cafferata and
Poggesi, 2012). This part of the liability of newness theory is extensively researched by scholars. Stuart, Huang and Hybels (1999) states that new ventures don’t possess these social ties, making it harder to compete effectively with established ventures. Summarised, developed social ties offer credibility, contact and support, and they provide a positive outward image of a venture (Ostgaard and Birley, 1996).
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The second element Stinchcombe (1965) mentions that is part of the liability of newness is the lack of reliability and accountability. The definition of reliability in this context is the certainty that a given product produced by a venture will be available when needed, and that this product will be of a certain minimal quality (Hannan and Freeman, 1984). Accountability is defined as being able to justify how resources have been used to produce products, and how organizational decisions, rules and actions have led to particular outcomes (Hannan and Freeman, 1984). Potential stakeholders, such as members, investors and customers require reliability and accountability as they demand assurance that their investments of time, commitment and money will not go to waste (Hannan and Freeman, 1984).
The third element mentioned by Stinchcombe (1965) is that of a lack of (learning)
experience. He states that new ventures suffer from a “low average quality of performance”. This is caused by a combination of a lack of managerial knowledge and financial management
capabilities in new ventures, something established ventures do possess (Thornhill and Amit, 2003). Moreover, this lack of experience means new ventures still have to go through the process of inventing routines and ways of working. As Stinchcombe (1965) summarizes: “The process of inventing new roles, the determination of their mutual relations and of structuring the field of rewards and sanctions so as to get the maximum performance, have high costs in time, worry, conflict, and temporary inefficiency”
The lack of social ties, reliability and accountability and experience are difficult obstacles to overcome for new ventures, as they are key elements required to survive in the long term (Pollack, Rutherford and Nagy, 2012). While many new ventures fail, some turn to external resources such as so-called business incubators for help to increase their chances of survival
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(Chen, 2009). Research has been done to investigate whether these incubators can help new ventures during the first years of growth and have found them to be effective (De Pinho, 2011).
A business incubator is an entity that provides various (shared) services to new ventures, such as affordable office space, centralised services and networking possibilities (Allen and Mccluskey, 1990). They create a supportive environment by providing resources, services and (management) assistance to the member ventures; something the new ventures themselves usually lack or cannot afford yet (Peters, Rice and Sundarajan, 2004).
While extensive research has been done on the influence these various business
incubators can have on new ventures (Bøllingtoft and Uløi, 2005; Mcadam and Mcadam, 2008), many of these scholars have focused on whether this influence exists, not how the resources a business incubator can offer helps new ventures. Previous research found evidence that support activities by an incubator can help to overcome the liabilities of newness in general (Trott, Scholten and Hartmann, 2008) and there is also evidence that the use of an incubator’s resources adds to the stock of resources available to the organization (Rothaermel and Thursby, 2005; Carayannis, el al., 2006; Mcadam and Mcadam, 2008). However, there is no research that directly links these added resources to the elements of the liability of newness.
For instance, it is interesting to see that many of the resources incubators offer seem to have direct relations to elements from the liability of newness theory: incubators may offer a platform and facilitate network ties between various members of the incubator, helping to overcome the lack of established social ties (Bøllingtoft and Ulhøi, 2005; Ebbers, 2013). They may also facilitate endorsement, which could be used to overcome the lack of accountability and reliability (Deephouse, 1996). Lastly, incubators can offer management assistance such as business support, advice and coaching to member ventures (Bøllingtoft, 2012). This could help
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the new ventures to overcome the lack of learning experience. The relationship between these resources and the liability of newness and the extent to which the providing of these resources helps overcome the liability of newness has been researched insufficiently.
In this thesis I will attempt to create more insight into this relationship by focusing on the following question: Do the resources incubators offer help new ventures overcome the liability of newness?
In order to answer the overall research question, I have formulated the following sub questions: • Which resources does an incubator offer to new ventures?
• How do the resources offered by the incubator help to overcome the lack of social ties? • How do the resources offered by the incubator help overcome the lack of accountability
and reliability of a new venture?
• How do the resources offered by the incubators help to overcome the lack of learning experience?
Thus, the contribution of this thesis is to combine the liability of newness theory with the specific resources incubators offer new ventures. This knowledge can help new ventures gain a better understanding of the influence a membership of an incubator can have. It also gives incubators a better understanding of what the benefit of the resources they provide is on the liability of newness. Previous researchers have used the resource based view (Penrose, 1959; Barney, 1991), in order to examine the resources used in university spin-offs (Trott, Scholten and Hartmann, 2008) and corporate incubators (Becker en Gassmann, 2006). This view defines resources as the basic building blocks ventures use to conduct business. I will use the resource based view in this thesis to define and analyse the resources incubators offer to new ventures.
9 1.2 Research methodology
This research is of an explanatory nature, because there is no research yet on which resources a bottom up incubator offers has and how these resources have influence on the liability of newness. Therefore I hope to offer insights that could lead to future empirical research. An inductive qualitative method is used in this thesis. This approach helps the development of understanding and permits the research to change while it progresses (Saunders, Lewis and Thornhill, 2009).
This thesis begins with research into the literature on the liability of newness theory and on the various types of incubators and the resources they offer. Then, a qualitative theoretical framework is proposed. The theoretical framework is further used to review relevant literature on the resources based view, lack of social ties, reliability and accountability and learning
experience. From this framework five propositions are conducted.
Qualitative data is gathered from semi structured interviews, in order to create a data set for this research. Previous research has tended to rely on survey data from incubator managers alone but according to Bøllingtoft, (2012) it is necessary to assess the incubator impacts by obtaining information from the ventures within the incubator.
The empirical setting for my research is a case study on incubators in the creative industry. A case study is a good way to obtain in-depth information about the views and ideas of members of incubators (Simons, 2009). The sample population consists of two incubators: MidWest in Amsterdam and Vechtclub XL in Utrecht. Both incubators give room for creative entrepreneurs and are relatively new and still in development.
In order to analyse and process the unstructured data from the interview, the results are coded. A qualitative text analysis is used to abstract the information. This data is then organized
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using the computer program NVIVO. This program can be used to code and analyse all forms of unstructured data. The results are interpreted, and used to answer the sub questions. These answers are then used to answer the main research question and to provide a final conclusions and recommendations.
1.4 Structure
The structure of this thesis is as follows: chapter two provides a theoretical framework where the liability of newness and the lack of social ties, reliability and accountability and lack of learning experience are discussed. The concept of incubators is discussed and the “resource based view” is explained. In chapter three, the propositions for this research are presented and further
explained. In chapter four the methodology of the qualitative research is discussed. This chapter specifies the research design and strategy, the data collection method, the sample collection, the quality of the research and the method of analysis. Chapter five consists of the results of the semi structured interviews. In chapter six the results are interpreted and, based on these interpretations, a conclusion is drawn and limitations of this thesis and recommendations regarding future
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2. Theoretical framework
This chapter will discuss the theoretical framework. First the liability of newness theory will be discussed. Second, the three elements of this theory will be explained: the lack of social ties, the lack of accountability and reliability and the lack of learning experience. Third, the types of incubators and the resources they provide will be discussed and last the resource based view theory will be explained.
2.1 Liability of newness
According to the research of Carroll et al. (1983) ventures are most likely to fail in the first few years of operation. Later studies confirm this theory by proving lower failure rates as ventures grow older (Singh, Tucker and House, 1986). There are several explanations for why these new ventures fail. For instance, managerial failure such as a lack of entrepreneurial characteristics (Thompson, 2004) and bad management strategy (Zacharakis, Meyer and Decastro 1999). Or financial failure such as inappropriate use of financing (Carter and Wilton 2006) and insufficient access to capital (Carter and Van-Auken 2006). Stinchcombe (1965) has argued that young ventures suffer from something called “liability of newness”, which states that new ventures lack three critical elements compared to established ventures. These three elements are: the lack of developed social ties (Stinchcombe, 1965), the lack of accountability and reliability (Hannan and Freeman, 1984) and a lack of learning experience (Schumpeter, 1934; Nelson and Winter, 1982). They will be further discussed in the following chapter.
This almost fifty years old theory has played an important role in the development of literature on organizational evolution, specifically the organizational ecology literature, where Stinchcombe’s theory is the most significant theoretical basis on organizational development and mortality (Abatecola, Cafferata and Poggesi, 2012). Various researchers have found consistent
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findings for the liability of newness in a number of industries (Abatecola, Cafferata and Poggesi, 2012).
Over the years, various scholars have published additions or challenges to the liability of newness theory. In 1986, Aldrich and Auster developed the “liability of smallness” theory, which implies that most ventures fail because of their small size (rather than their age), causing a lack of financial resources, impossibility to attract skilled personnel and difficulty to meet high interest rate payments. (Abatecola, Cafferata and Poggesi, 2012) There is a lot of empirical evidence supporting that failure rates decline with increased venture size. The liability of smallness theory is not only considered as an alternative to the liability of newness, but one of its most probable explanations (Delacroix and Swaminathan, 1991; Baum and Oliver, 1991; Baum and Mezias, 1992). However, newness and smallness are often interrelated and the effect of newness on death rates results is often found to be stronger (Halliday, Powell and Granfors 1987).
In 1991, Stinchcombe’s theory was challenged by Fichman and Levinthal (1991) who introduced the theory of the “liability of adolescence”. This theory suggests that ventures don’t only have significant failure rates in the beginning of their existence, followed by a continuous failure rate decline but that venture failure rates can be explained as having an inverted U-shape with a peak at seven years and then a gradual decline later on (Abatecola, Cafferata and Poggesi, 2012). The liability of newness, smallness and adolescence theories have been studied
extensively and despite these alternative theories the liability of newness is still widely accepted among contemporary scholars (Abatecola, Cafferata and Poggesi, 2012).
13 2.2 Undeveloped social ties
Having a solid network is one of the key elements in venture success (Bøllingtoft, 2012). The influence of this network on ventures has been researched extensively (Malecki,1997; Birley, 2000;Dubini and Aldrich, 1991, Bøllingtoft, 2012) They are particularly important to new ventures because they can provide access to information, advice and influence as well as resources the new venture does not possess yet (Bøllingtoft, 2012). On top of this having social networks means customers are used to the way the venture works, allowing for smooth sales processes. (Abatecola, Cafferata and Poggesi, 2012) One important factor of a social network is trust, which is defined as “a representation of behavioural reliance on another individual under a condition of risk” (Chen and Wang, 2008). Unfortunately new ventures have undeveloped social ties (Stinchcombe, 1965). Social ties can be seen as social capital, which is the sum of potential resources that are available through the network (Greve and Salaff, 2003). New ventures miss the built up trust with stakeholders such as clients and other companies to establish strong social ties and gain resources. Established ventures have a long-term relationship with stakeholders such as customers, but new ventures have problems persuading potential stakeholders to support them (Stinchcombe, 1965). Therefore new ventures need to undertake activities to expand their network (Delmar and Shane, 2004).
2.3 Lack of accountability and reliability
Because new ventures lack a track record of customers and finished projects, potential stakeholders such as members, clients and financers have trouble assessing their reliability and accountability (Hannan and Freeman, 1984). This also raises uncertainty about the quality of the new venture (Trott, Scholten and Hartmann, 2008) and stakeholders tend to be sceptical towards these ventures (Hannan and Freeman 1984). An important way for new ventures to overcome the
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lack of reliability and accountability is by taking actions that provide them with so-called
legitimacy in the eyes of stakeholders (Rao, Chandy, and Prabhu, 2008). Legitimacy is defined as being “a generalized perception or assumption that the actions of an entity are appropriate and desirable” (Suchman 1995).
Legitimacy (and therefore accountability and reliability) can be obtained either internally or externally. Internal legitimacy is obtained by historical evidence, by placing executives or scientists with a proven track record in more established industries on the board of the new venture, or by being based in a specific location (for example, Silicon Valley for tech ventures) (Rao, et al. 2008). However, it is hard for new ventures to create internal legitimacy because they have no past track records (Hannan and Freeman, 1984) and they lack the resources to attract these people or rent office space at these specific locations (Delmar and Shane, 2004). Therefore new ventures need to obtain external legitimacy: the perception by the outside world that the venture is legitimate (Delmar and Shane, 2004). Rao et al. (2008) argue that new ventures can obtain this external legitimacy by creating associations and forming alliances with more established entities. This is done by having established ventures provide endorsements: a
favourable opinion given by one venture to another (Deephouse, 1996; Rao et al., 2008; Deeds., Mang, and Frandsen, 1997; Starr and MacMillan, 1990; Stinchcombe, 1965). Endorsements show confidence in the new venture which is beneficial because it becomes more reliable and
accountable in the eyes of the stakeholder (Deephouse, 1996). Aldrich and Fiol (1994) and Zimmerman and Deeds (1997) suggest that if an established venture forms an alliance with a new venture it identifies itself with the new venture (Deeds et al., 1997; Dowling and Pfeffer, 1975). The new venture therefore gains immediate access to the internal legitimacy that the established ventures already possesses (Rao, et al. 2008). Through alliances, new ventures can attain both
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direct resources such as specific skills and financial resources, and indirect resources such as legitimacy (Eisenhardt and Schoonhoven, 1996). This means the new venture can lean on the accountability and reliability of the established ventures (Starr and MacMillan, 1990).
2.4 Lack of (learning) experience
According to Stinchcombe (1965) new ventures lack (learning) experience. They usually have specific knowledge in their own field (Mcadam et al. 2008), but lack specific management skills (Oakey, 2003). Skills and experience are a precondition to compete effectively with the
established ventures (Yli-Renko, Sapienza, and Hay, 2001). It enables new ventures to detect emerging opportunities and new trends in the industry and helps evaluate potential investments and growth (Kor, 2003). Entrepreneurs tend to become more effective with age as they have experience and knowledge concerning exploration and exploitation of successful routines (Nelson and Winter, 1982; Hodgson and Knudsen, 2004; Ulvenblad, Berggren and Winborg, 2013). Entrepreneurial learning is often described as a continuous process that facilitates the development of necessary knowledge for being effective in starting up and managing new
ventures (Politis, 2005). A diverse background or previous experience may provide a more robust basis for learning and development in new uncertain situations (Cohen and Levinthal, 1990). However, if the management of a new venture lacks previous experience or a diverse background it is necessary to gain this knowledge from external sources through seminars, trainings or
16 2.5 New ventures
The definition of a “new venture” is ambiguous because among scholars researching new
ventures because the exact start and endpoint of an emerging venture is unclear. Moreover, there is no consensus as to which activities can still be seen as part of an emerging venture. According to Dahlqvist and Wiklund (2012), a new venture devotes time and resources but does not
generate a steady income yet. Reynolds and miller (1992) define an emerging time of 12 months which is short compared to the 32 months Liao, Whelsch and Tam (2005) use and the 5.4 years Ven de Ven, Hudson, and Schroeder (1984) founf for software start-ups. Hewerdine and Welch (2013) state that the emerging period is commonly seen as the identification of a business
opportunity but begins in the planning phase before starting a venture, and continues well beyond the first business opportunity. The average length of the venture’s pre-organizational phase ranged between 4 to 10 years and the follow-up period for a corporation to form took 6 to 14 years and even then the venture was still considered still fragile and provisional in nature (Hewerdine and Welch, 2013). For this research, a “new venture” is defined as being a venture not only in its early stage but also in its emerging phase (less than 15 years of operation). This can give a complete picture of the three lacking aspects of the liability of newness. This means that “newness” and “new ventures” are less of a temporal term but more of a “method of operation” of ventures.
17 2.6 Incubators
The universal purpose of a business incubator is to increase the chance of business survival in its early years (Bøllingtoft, 2012). There has been extensive research on business incubators and entrepreneurship (Hackett and Dilts, 2004, Bøllingtoft and Ulhøi, 2005; Ebbers 2012). The term business incubator can be defined as a venture that provides various services, such as affordable office space and central services to (mostly) new ventures (Allen and McCluskey, 1990). While the specific definitions of an incubator’s activities vary, all of them include assistance in the creation of a venture and its development during the first years of growth (De Pinho, 2011). This assistance is realised by providing resources and services and offering reduced overhead costs by sharing facilities. Through this process, an incubator can improve the survival rate and growth of new ventures in an early stage of development (Bøllingtoft, 2012) and help create and establish the resources and competencies of new entrepreneurs in order to ensure the economic
sustainability of their ventures through periods of shock and crisis (De Pinho, 2011).
Key characteristics of a business incubator are: Low priced rent, shared services such as connectivity, administration and receptions, access to support networks and existence of entry and exit policies, determining when a new venture can enter and is required to leave the incubator (Hacket and Dilts, 2004). Only the presence of entry and exit policies have been contested by Peters et al. (2004). There is however some confusion about the exact meaning of the term
business incubator. Business incubators can be seen as an umbrella concept which describes a lot of different incubators, with their own specific priorities and ideas (Aernoudt, 2004). Examples are Business accelerators, Science park Incubators, networked business incubators etc.
(Bøllingtoft, 2012) A common way to categorise incubators is by splitting them in top-down and bottom-up incubators. Top-down incubators are concerned with real estate development and offer
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cheap office space in renovated old buildings or by actively supporting new ventures (Ebbers, 2013). Top-down incubators focus on assisting ventures through providing services and expertise. Bottom-up incubators, on the other hand, are jointly established by entrepreneurs and are not fully supported by public or private funds, but generate own income and focus on the
relationships between member ventures (Bøllingtoft, 2012). These bottom-up incubators have the same traits as top-down incubators such as co-location of businesses and access to shared
equipment but acknowledge mutual recognition (Bøllingtoft, 2012). The focus of bottom-up incubators lies on the value of networking and cooperation among the member ventures which will lead to cross-fertilization (Bøllingtoft, 2012) , where a top-down incubator focuses on an intermediating role and actively influence the network (Bøllingtoft, 2012).
2.7 Resource based view.
The resource-based view is a theory used to investigate the use of key resources in ventures. According to Penrose (1959) and Barney (1991), ventures are a collection of unique resources and capabilities. Through these unique combinations they are able to conduct business and provide added value. Barney (1991) distinguished financial, pshysical, human, commercial, technological and organisational resources. Grant (1998) categorised the organisational resources into three types: human, tangible, and intangible resources. For this thesis, I will use the
definition as stated by Grand. Human resources can be described as all resources people bring to the venture and usually include knowledge, expertise, talents, creativity, skills and networks (Chen, 2009), present in a venture. Tangible resources can be defined as all physical resources ventures poses and include financial resources and physical assets (Hill and Jones, 2004).
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Intangible resources are non-physical entities including brand names and the intellectual property (Grant, 1998).
Subsuk and Laosirihongthong (2014) used the resource based view to explain how university business incubators resources and capabilities to enable start-ups to gain a competitive advantage. In this thesis the resources based theory will also be used to examine the incubator. Human resources than an incubator can offer are for instance cooperation with the incubator and other creative entrepreneurs in the incubator, specialist programmes and seminars for a reduced price and learning among its member ventures (Mcadam and Mcadam,2008) . An incubator can atract venture capitalist wich can relate to the incubator immage and can proviside credibility to member venture which is an example of an intangible resource (Mcadam and Mcadam,2008) The physical building and financial support that an incubator are forms of tangible resources an incubator can offer (Hacket and Dilts, 2004).
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3. Propositions.
From the theory outlined in chapter two five propositions have been defined. These propositions will be tested in order to answer the sub questions and central research question of this thesis. Early incubators only offered a physical infrastructure to new ventures but nowadays incubators provide a whole range of services including training, networking and business consulting (Peters et al., 2004).
The first sub question of this thesis asks what resources incubators offer? While no two incubators are exactly alike (Allen and McCluskey, 1990, Bøllingtoft 2012), previous research has used the resource based view in order to examine these resources (Trott, Scholten and Hartmann, 2008; Becker and Gassmann, 2006), in this research the resource based view will also be used to examine the recourses incubators offer.
Proposition 1: An incubator provides access to tangible, intangible and human resources. Tangible resources include office space, office material and financial support. Intangible
resources include brand name and image endorsement and intellectual property. Human
resources include knowledge and expertise, creativity, talent, skills and an internal and external
social network.
The second sub question asks how the resources offered by the incubator help overcome the lack of social ties. Incubators may help new ventures overcome this problem by facilitating a network of social ties, internally between the new venture and other members of the incubator as well as external ties with business partners (Bøllingtoft and Ulhøi, 2005; Ebbers, 2013).
Proposition 2: An incubator can directly help a new venture to overcome the lack of social ties by providing the human resource of an internal network among member ventures.
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Proposition 3: An incubator can directly help a new venture to overcome the lack of social ties by providing the human resource of an external network of business partners.
The third sub question asks how the resources offered by incubators help overcome the lack of accountability and reliability of a new venture. Through gaining external legitimacy by creating associations and forming an alliance with more established entities a venture can substitute the lack of a proven track record. (Rao et al., 2008) Incubators can be the established entity that offers endorsement and tangible resources that a new venture would normally not be able to afford, and thus help overcome the lack of reliability and accountability for new ventures. Therefore the second proposition is:
Proposition 4: An incubator can directly help a new venture to overcome the lack of reliability and accountability by providing tangible resources such as office location and by providing
intangible resources such as endorsement.
The fourth sub question is: How do the resources offered by the incubators help to
overcome the lack learning experience? Incubators offer management assistance such as business support, advice and coaching (Bøllingtoft, 2012) to help the entrepreneurs and their ventures (Bøllingtoft, 2012). This can help new ventures overcome the lack of learning experience.
Proposition 5: An incubator can directly help a new venture to overcome the lack of learning experience by providing the human resource of internal knowledge and expertise
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4. Research methodology
In this section, the research methodology is presented. First, the chosen research design and strategy will be elaborated. Second, the sample and the data collection processes are described. Third, the quality of the research is explained by discussing to what extent credibility, transferability, dependability and conformability are ensured. Last, the method of analysis is discussed.
4.1Research design and strategy
The purpose of this research is exploratory the influence of the resources an incubator offers on the liability of newness that new ventures have. An inductive approach with qualitative research is used because there is no existing research yet on the relationship between the resources the incubator offers and the elements of the liability of newness. An inductive qualitative research is a good approach to help the understanding of this subject and its complexity, as this approach helps the development of understanding and permits the research to change while it progresses (Saunders, Lewis and Thornhill, 2009). This thesis not only provides insight in which resources are offered by the incubator but also aims to provide an explanation on how these resources affect the liability of newness of new ventures in a real life context.
For this research a case study is conducted. A case study is a good way to study subject in-depth and to find a detailed answer to a complex phenomenon in a real life situation (Simons, 2009). An in depth study is necessary because it gives a detailed answer how incubator member ventures experience the offered resources and how they believe these resources influence their liability of newness. This case study is of a multiple case design because two different bottom-up incubators are used in this research: MidWest and Vechtclub XL. The fact that no two incubators
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are exactly alike (Allen and McCluskey, 1990) and the fact that both incubators can be characterized as bottom-up incubators made them prime case subjects. A disadvantage of this approach, however, is the small sample size, as a result of which generalizability is limited (Saunders et al., 2009). However, because this research is of an exploratory nature, the aim is not to provide a completely generalisable result set, but rather provide a basis for further empirical research, which will hopefully lead to generalisable conclusions.
For the data collection only primary data is used in the form of semi-structured interviews. This type of interviews are used because open-ended questions are the only way to examine how the resources the incubator offers have influence and are perceived by the ventures. By adding variation in the order in which the questions are asked a framework is created, allowing the interviewed persons plenty of freedom to give a complete picture of the member ventures view on the various subjects. This allows the researcher to collect a rich and detailed set of data (Saunders et al., 2009).
4.2 Samples
The sample collection for this research took place at two incubators: Vechtclub XL in Utrecht and MidWest in Amsterdam, both of which are focused on the creative industries. These industries include architecture, film, fashion, music, game and performing arts (Scott, 2004). Both incubators give room for creative entrepreneurs, showing a mix of different disciplines, most of which are within the fields of consultancy, design, product development, photography, branding, websites, game design and music. Both incubators are relatively new and still in development, Vechtclub XL was founded in 2010 and Midwest was founded in 2012. At the time of the interviews Vechtclub XL had 93 member ventures and MidWest had 56 respectively. Both
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incubators are founded because of a demand from the community and have a small direction board of 3 persons who are creative entrepreneurs themselves. Vechtclub XL and MidWest offer a possibility for entrepreneurs in the creative industry to rent an office space but also actively promote crossovers and have a strong sense of community building. This makes them comparable.
Vechtclub XL is started as a side project from project bureau Stortplaats van Dromen who mainly engages in the design, building, and (concept) development of projects (www.stortplaatsvandromen.nl). From the need of creative entrepreneurs for an alternative nightlife and workplaces Vechtclub is founded in 2006 (www.vechtclub.nl). Due to its big expansion it has moved to another building and was transformed to Vechtclub XL in 2010 (www.vechtclubxl.nl). Besides offices Vechtclub XL also offers rehearsal studio’s, workshops, flex-places and will eventually offer a restaurant and exposition room. Vechtclub XL is both a B.V and a foundation that rents the location from the government and is largely financed with crowdfunding and rent from the creative entrepreneurs.
Co-op MidWest has started from the “Geef om de Jan Eef” foundation that promoted a better social environment in the district (Kennisbank Herbestemming, n.d.). From this foundation Co-op MidWest started their own foundation and changed to cooperation with the purchase of the old school building where MidWest is situated. (Kennisbank Herbestemming, n.d.) Initial funding for MidWest was done by the government but later income should come from the creative entrepreneurs in the neighbourhood. (Kennisbank Herbestemming, n.d.) Co-op MidWest is a neighbourhood development venture, which means it provides Corporate Social Responsibility in the district. The profit of the neighbourhood in social and finance flows back to the district. (http://midwestamsterdam.wordpress.com). Co-op MidWest is led by people who
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have strong roots in the neighbourhood. They provide workspace, flex offices and
meeting/training rooms. The gym, the outdoor space, the basement and the canteen are regularly used as a location for film or photography and as a rehearsal space for theatre, artists and
musicians. (http://midwestamsterdam.wordpress.com).
4.3 Data Collection.
The creative director of Vechtclub XL was a key informant that arranged interviews with the creative entrepreneurs in the incubator and a list of other creative incubators that would fit in the research. After contacting seven different incubators, MidWest agreed to cooperate with this research. MidWest provided information on the persons to interview on behalf of the incubator and the creative entrepreneurs who were willing to cooperate. Participants of MidWest were contacted by e-mail, explaining the research. For Vechtclub XL the creative director posted an advertisement on facebook asking for people willing to cooperate and a date was planned by e-mail. Because there were not enough respondents a second e-mail was sent to the participating respondents with the request to ask other tenants to join the research, using the internal network of the incubator to receive additional responses.
The semi-structured interviews consisted of 16 respondents, each of which was interviewed in the period of April - July 2014. There were six people interviewed at Vechtclub XL of which five creative entrepreneurs and one person of the management. At MidWest, ten people were interviewed of which nine were creative entrepreneurs and one was an employee of MidWest. The interviews took place in the offices or canteen of Vechtclub XL and MidWest.
All of the interviews followed more or less the same interview protocol. First five demographic questions were asked about the gender and age of the interviewed and how long the
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entrepreneurs were working for/a member of the incubator, when their venture was founded and more information about their function/own venture. The sample consisted of seven men and nine women, with an average age of 38. The numbers of years the respondents were a member at MidWest was between three months and one and a half year. At Vechtclub XL this was between one month and three years. Eight respondents had a venture between six months and five years of age, and six respondents had a venture that was between 6 and 15 years of age. All the respondents were small ventures, two companies have employees and for the rest of the ventures the owner was the sole employee.
The semi-structured interviews consisted of 18 open-ended questions about their venture and the incubator. The interviews had duration of approximately thirty minutes to one hour. First, the respondent was asked for permission to record the interview and if they wanted to stay anonymous. There were no objections to the use of the respondents’ full names in the interview transcripts. In addition, terms of confidentiality were addressed. The interviews were audio recorded, so that no information would be lost. A transcript was made of each interview by listing to the audio recordings and transcribing the exact words of the interview ensuring objectivity.
4.4 Questions of the semi-structured interviews
The questions asked during the semi-structured interviews can be found in appendix 1. The questions are used as a framework for the interview and give enough freedom to the respondents to add additional information for the respondents. The first part of the interview was about the liability of newness. Questions involved in this part give an understanding what the respondents saw as important resources for their ventures.
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The second part of the interview was about the resources the incubator offers, which answers the question if the resources of an incubator (structured according to the resource based view) can have influence in the new venture (appendix 1). The resource based view (Penrose, 1959; Barney, 1991) is used to separate different the kind of resources offered by the incubator (table 1). Respondents were asked which resources where provided by the incubator and how these resources had influence on their venture.
Table 1 different kind of resources (Grant, 1998; Cohen and Zysman, 1988; Hill and Jones, 2004)
The third part of the interview focused on how the resources that incubators offer have on the various elements of the liability of newness. Questions were asked on acquiring social ties through the incubators network, reliability and accountably and increased learning experience of the venture. For this part the previous answers of part one are discussed further and additional questions are asked per element.
Networks can be seen as a critical element for survival and growth of a new venture in several ways (Bøllingtoft, 2012). Therefore the first question asked about whether a network is important for the venture and why this is important. An incubator can offer tenants access to potential customers suppliers, technology partners and investors (Hansen et al., 2000) however Human resources Tangible recourses Intangible resources Knowledge and expertise Financial support Brand name endorsement Internal / external network. Financial assets Image endorsement Talent Office space and contents Intellectual property Creativity
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most incubator managers don’t introduce tenants to these external partners (Bøllingtoft, 2012). Therefore the next question asked if the incubator expanded the network of the incubator and in what way. Incubators can facilitate a network of social ties, internally between the new venture and other members of the incubator as well as external ties with business partners (Bøllingtoft and Ulhøi, 2005; Ebbers, 2013) therefore the last question about incubators asked if the venture experienced an increase in customers.
Questions that are asked about the reliability and accountability are the respondents were also asked if they had experienced an increase in this business quality and if they believed the incubator was responsible for this increase.
Incubators can be seen as vital in allowing new ventures to learn and acquire knowledge by offering management assistance such as business support, advice and coaching and from potential collaborative opportunities (Bøllingtoft, 2012). Therefore the respondents were asked if they experienced an increase in experience and knowledge and if the incubator had any influence on this and if so in what way. Rice (2002) points to the importance of the relationship between the incubator manager and new venture to determine the timing and frequency of business support which is needed. Therefore the question that is asked is if the incubator has the idea that incubator is receptive and helps you further your own interests.
The last question provided all the respondent, the opportunity to talk about subjects that respondents thought were not covered thoroughly in the rest of the interview.
4.5 Quality of the research
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Because this research is a case study the generalizability of the findings is limited. (Saunders, et al., 2009) By using two different incubators the external validity is observed as well as possible in a case study. All questions asked during the interviews have direct relationships to the theory behind the liability of newness, ensuring the dependability of the research. Moreover, the questions and the interviews were recorded and transcribed and are provided in the appendix, allowing other researchers to replicate the research and retrieve information about the answers. To ensure objectivity there is a literal transcription of the interviews in the appendix making it less likely for the researcher to draw early conclusions. To support the findings the data is divided in categories which emerged from the theory as well as from the data itself. The data was then analysed by using the NVIVO text analysis program. Thorough, automated examination of the interview transcripts prevents a potential bias.
To ensure credibility, member checks are used, the interview transcripts were sent to the corresponding respondents so the respondent can reply if there were any remarks on the transcript.
4.6 Method of analysis
The data is analysed by using the NVIVO program’s text analysis function on the interview transcripts. The data gathered is used to develop codes. In order to structure the data the relevant answers are attached to the appropriate codes and key themes or patterns are identified. The first key theme is the resources offered by the incubator which will be divided into tangible, intangible and human resources the incubators offered by the incubator, a detailed view of the coding can be seen in table 1. The second key theme is divided into resources that improve the three key
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mentioned an improvement or no improvement in the three elements. The key code social ties, is also sub divided in the importance of the network and if the improved socialites have led to an increase in customers within or outside the incubator. Increased leaning experience is also divided in the improved experience within the own field of work or in general business
experience. Results are based on the analysis of the primary semi-structured interview transcripts and supported with respondent quotes.
Table 2 codes used to structure the three elements of liability of newness.
Key code Sub code sub-sub code
resources improve social ties Improved social ties increase customers intern increase customers extern No improved social ties
Network important
resources improve
reliability and accountability
Improved reliability and accountability
No improved reliability and accountability
resources improve learning experience
improved learning learning general business learning in own field no improved learning
31 5. Results 5.1 Offered resources by incubators
From the three resource categories, tangible, intangible and human, the incubators offered mostly human resources (table 2), 15 different respondents have mentioned human resources in a total of 83 instances. According to the respondents, the incubators also offered intangible resources in the form of image and brand name endorsement, 14 different respondents have mentioned intangible resources in a total of 53 instances. The tangible resources, however, are hardly mentioned: only nine out of the 16 respondent mentioned tangible resources in a total of 19 instances.
Table 3 Different dimensions of recourses offered by the incubator.
Notes: N = 16. Frequencies reflect number of times a participants reported the subject. Respondents reflect the number of unique respondents who mentioned the subject. Dimensions of
resources
Frequency of reported subject (respondents)
Examples and sample comments
Human resources 83 (15) It immediately struck me that there was a great community in place here but there was also an active afford being made to grow the community to maintain it.
Tangible resources
19 (9) A lot of self-employed people you offer a place and a platform; it is easy to start your venture Here because it is not expensive.
Intangible resources
53 (14) We sort of share the same look on society or entrepreneurship. It helps my image, the image of MidWest reflects on my own image.
32 5.1.1 Human resources.
Looking at table 3 the incubators network is mentioned 48 times by fourteen different respondents. This means the network is by far the most mentioned human resource in this research. While the respondents mentioned the incubators don’t offer direct resources to build a network, they try to facilitate the network indirectly by organising informal meetings. As one respondent mentioned, “they organize some events, some networking kind of things. But they are all super informal and just pleasant and they are mainly aimed at the people in the building”. The incubator does facilitate the building and sharing of knowledge and expertise by offering
workshops and breakfast mornings. “What they do facilitate is like knowledge mornings they have in the canteen. They have this breakfast mornings where you can share knowledge and you can invite people over”. Most respondents see knowledge, expertise, skills and talent as one and the same thing summarized as knowledge. “Well, I don't know how to distinguish that from knowledge and expertise but there are a few people that are very talented and successful here.”In contrast, talent is mentioned only two times and skills only four times. Respondents mentioned that the incubator did not provide any resources to develop this: “I do think they provide talent. But they do not guide them to develop their talents” (table 3). Creativity is mentioned nine times; in the context that the incubator offers creativity through the building and the atmosphere the incubators is creating. “Absolutely, yes. Both in public events but also the general atmosphere within the building. Artists here display their work in the hallway and it helps to create a very good vibe“. (Table 3)
33 Table 4 Human resources offered by the incubator.
Notes. N = 16. Frequencies reflect number of times a participants reported the subject. Respondents reflect the number of different respondents who mentioned the subject.
Vechtclub XL offers members the opportunity to be involved in other projects. As one employee mentioned: “we always ask them like if people would like to have a book presentation here, or a brainstorm, is there a possible way to involve people from Vechtclub. So if you have a
brainstorm, you could have some input from creative’s as well “. However, none of the members Human resources Frequency of
reported subject (respondents)
Examples and sample comments
Creativity 9 (6) Yea: absolutely. In a way that everything looks and feels creative. It is not the case that they support your creativity or having lectures planned. But it is more the look and feel the experience of the Vechtclub.
Knowledge and expertise
20 (10) It is not the Vechtclub who provides it; it is the people that provide it. I've seen people who provide workshops but it is not from the Vechtclub.
Network 48 (14) When I came here in the summer of last year it immediately struck me that there was a great community in place here but there was also an active afford being made to grow the community to maintain it, to make sure it’s remained a great group of people.
Skills 2 (2) No, they don't support you in your skills. maybe they do but I haven't seen that
Talent 4 (4) Well, I don't know how to distinguish that from knowledge and expertise but there are a few people that are very talented and successful here.
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mentioned this recourse to gain knowledge and expertise. Instead, they generally mentioned most of the workshops are organized by the members themselves “Well there are all kinds of
workshops, it is creative, this is mostly arranged by the tenants themselves. One gives a
workshop about LinkedIn, another one about an ergonomic workspace, everybody is taking care of each other”. In fact, the respondents didn’t expect the incubator to provide this extra
knowledge either. Some of the respondents even mentioned they don’t see this place as a real incubator. “They don't offer the things other incubators do offer. They have a way more informal way of incubating. For example you don't need a goal what you want to achieve or what is your goal that is not the Vechtclub XL incubating style “.
The respondents did however, gain knowledge from the other members through informal conversations and by asking specific questions “There are a lot of likeminded people that can help you, how do you do this, and how did you solve this I think it is good for two ways”. By being a member of the incubator the respondents gained access to free knowledge that otherwise should have been purchased. “Most of this can happen in an informal way. For instance asking for advice so you don't need large formal companies who ask a lot of money. “
The members of the incubators mentioned that the internal network is facilitated by the incubator, but that the effort to actually make connections has to come from themselves “yes, but just by being there I guess. There are also people here that work here but don't do anything and complain that there is nothing to do and they don't meet people. But that is just because they don't do something themselves. Vechtclub XL makes it possible to meet people but I have to do it myself”. By organising informal meetings such as a breakfasts, drinks and shared rooms the members can come in contact with other people. The incubators provide an atmosphere where it is easy to create connections and make social contact. “They make it really easy to meet people.
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As soon as your office is in Vechtclub XL it is like you are part of something with the others. There is a connection. It is kind of like a family of which you don't know all the family members yet but there is some connection so you have something in common. It makes it easier to talk to others”.
5.1.2 Tangible resources.
Looking at the respondents’ reactions to the questions concerning the tangible resources offered by the incubators in table 4 the respondents have mentioned financial support seven times, by seven different people. Six of the respondents agreed on the fact that the incubators did not offer financial support “no, they don’t offer financial support to their tenants“. Financial support is mentioned twelve times. Three time respondents mentioned that the incubator does not provide financial assets. Seven of them mentioned a cheap of affordable office space as financial assets “It is not so expensive which is good of course”. This means only the cheap office space is a noticeable tangible resource offered by the incubator, there is no direct monetary support offered by the incubator, nor is any other tangible resource specifically mentioned. During the interviews, six respondents mentioned that their venture benefits from the fact that they experienced an improved the work/private balance by having a separate workspace, rather than working from home like they did before joining the incubator. This gave them more professional appearance towards their clients, making it easier to ask people to come to the office and it drew a clearer line between work and private life: “I have a separate place to work in, I can work more
productively here than when I have to work at home”. Some respondents also mentioned that just being in the incubator gave them a more professional business. For members of the incubator to say that they have their own office gives them the appearance of being serious about their venture and a more established image. They also mentioned its beneficial when external clients or
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business can come to an office instead of at home or a public place. “You can better profile yourself for the outside world because you are in this place and to have a professional studio.”
Table 5 Tangible resources offered by the incubator.
Notes. N = 16. Frequencies reflect number of times a participants reported the subject. Respondents reflect the number of different respondents who mentioned the subject.
5.1.3 Intangible resources.
About the intangible resources the respondents had widely varying opinions. Brand name endorsement was mentioned ten times by nine different respondents. Four times respondents mentioned that the incubators have a brand name that does not influence on their venture:”no, they think it is a funny name, but it doesn't have influence“(Table 4). Six times the respondents mentioned that the brand name of the incubator does have influence on their ventures. “We are much happier to say to a client that we are at Vechtclub than we would be to use the name of our previous locations in the past”. Image is mentioned thirty-seven times by fourteen different respondents (table 4), making it the most mentioned item in the intangible resource category. The fact that the image of the incubator is “raw” and that it attracts a certain kind of people is
Tangible resources
Frequency of reported subject (respondents)
Examples and sample comments
Financial support 12 (8) No, they don’t offer financial support to their tenants.
Financial assets 7 (7) No, Well it is quite cheap here, so that is some form of financial assets.
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mentioned eight times. The tenants benefit from the fact that there is a natural shift because of the image of the incubator. ”Vechtclub XL is kind of rough on the edges. So people who only want a cheap offices space won't come to Vechtclub XL. I think that it attracts a certain kind of people”. Moreover, the fact that the incubators offer the possibility for their members to have influence on the incubator’s way of working was clearly reflected in the incubator’s image. “It is still building, it is not a fixed place yet. There are a lot of creative places in Amsterdam but they exist for a few years and you come in and then you are in this structure.” Six respondents mentioned that the incubator does not offer any intellectual property. (Table 4)
Table 6 Intangible resources offered by the incubator.
Notes. N = 16. Frequencies reflect number of times a participants reported the subject. Respondents reflect the number of different respondents who mentioned the subject. Intangible
resources
Frequency of reported subject (respondents)
Examples and sample comments
Brand name 10 (9) The brand name of Vechtclub. I would say it does. We are much happier to say to a client that we are at Vechtclub than we would be to use the name of our previous locations in the past.
Image 37 (14) We do have a pretty strong identity of ourselves but it is a benefit to us to say that we are located here at this building. It has a good reputation as being one of the coolest buildings in Utrecht as far as we are concerned.
Intellectual property
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5.2 Influence of incubator resources on the lack of social ties.
Sixteen respondents mentioned that having a good internal and external network is very important for their venture and that it is the main source where the respondents get clients for their venture. Clients are usually provided by warm contact from the network ”I think 100%, all my assignments I got came from my network that is all my network does, they give me
assignments”. Some people mentioned they already had an extensive network outside the incubators and that most clients and contacts come from outside the incubator. There were five different sources that mentioned that they had no intentions to grow “I’m self-employed, that is a conscious decision and I have no ambitions to grow”. One respondent mentioned that the social ties are necessary for his venture to grow. ”growth for us is more a matter of alliances and building a network that is not fleeting. That we can rely on, it is easy to say that you have a network but I think the value of the network you build around a venture like hubbub is determent to what extend you can use that network to achieve certain things.”
However most respondents mentioned the incubators’ network did have influence on their social ties. 13 respondents mentioned an improvement in their social network a total of 37 times. Two respondents mentioned that they had extra clients outside the incubator because of the network in the incubator, through references from other members of the incubator to external clients. “Yes, people often refer other companies, freelancers etc. outside of Vechtclub XL to each other and I also refer my network to others.” The respondents mentioned an increase in work and collaboration inside the incubator with other creative entrepreneurs seven times. “Since I moved to Vechtclub XL I started working together with other people way more that I used to do before and that is also because you just meet so many people and there is a bigger change that they like what you do and want to work together”. The network could improve the quality of the
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business. “Yes. Better quality and quantity in network means better quality of the services I provide.”
Five respondents mentioned that the incubator didn’t help them on a business level but that it helped them more on a personal level. “You are not competitors, you are not co-workers but you are not friends either. You are just neighbours and people applaud you and say nice job good for you or when you have a bad day, that sucks let me get you a coffee. Just stuff like that.”
5.3 Influence of incubator resources on the lack of reliability and accountability.
The respondents that mentioned the brand name and image had an influence on their venture said the incubators brand name meant two different things. The first influence the incubator has, according to the respondents, is the fact that the incubators have received a lot of media attention and are well known in the city. This attention makes it easier for companies to relate to the
venture “MidWest has come a long way with exposure in the media and at congresses. That it is a venture that is for the neighbourhood and the venture vibe of pioneering and the “don't think just do”-mentality reflects in the name and if people recognize that it could be a benefit.” The image of the incubators is that of a place that is in motion, where new things are happening and one of creativity and innovation. This image is perceived as clearly reflecting on the members of the incubator. “When people know that you are in this network people might unknowingly put you in a specific group. That is that when someone who has a workspace in MidWest something is happening there. Midwest is always in motion and so am I“. This gives other businesses and clients a better understanding what sort of creative venture the member venture is. “It gives
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people a better understanding in what kind of business I want to run. … That is what I want to radiate with me being here. This is the kind of place I feel comfortable with.”
The second benefit respondents mentioned is that the venture can use the incubators brand name as a claim for big clients. Being part of a collaborative instead of only a single person gives larger prospects faith in the venture. “I could say I'm part of a bigger networked venture called Vechtclub XL that would support my standpoint and increase the chance that I could've gotten the client. Also I could diversify the clients I could pitch to.”
Two respondents mentioned that there is a gap between the image of MidWest and the image of their venture. The reason they mention for this is the unfinished old buildings and the level of professionalization of the venture: “I think there is some friction between that. My clients are mostly multinationals; I have worked for Mc Donald’s and the Schiphol Group. That clashes with the small thought of a neighbourhood venture.” Other reasons mentioned for the incubator not having a positive influence on the reliability and accountability of the member ventures is that the respondents mentioned already having a strong image on their own and therefore did not need the image of the incubators in order to establish legitimacy in the eyes of the stakeholders: “I also have my own signature in my work that it is something else”.
5.4 Influence of incubator resources on the lack of learning experience.
According to the respondents, incubators have a facilitating role in regards to gaining experience. This means the incubators offer the opportunity for knowledge and expertise exchange and not so much offer resources directly to the ventures. Respondents mentioned the incubator provides knowledge and expertise by offering workshops but that these workshops are used more as a way to expand their network instead of gaining knowledge.
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MidWest facilitated more indirect learning experience. “What MidWest does very good in my opinion is that they offer the expertise of the people within the community” The indirect knowledge that can lead to an increase in learning experience is shared through the collective knowledge of the people in the incubator. “I have my venture alone and I really need to have people to talk with sometimes to discuss about a difficult client or a difficult assignment.” The respondents mentioned an increase in learning experience from the other tenants sixteen times. “Here are so many different professionals in one place. There is always someone to find who knows more about whatever subject might arrive that is a big help for me that makes me feel really confident.” On the other hand, respondents mentioned that there was no increase in
learning experience eight times. These respondents mentioned that this was mostly because there were no other tenants in the building that had the same background. Two tenants mentioned they gained more expertise in their own work field from other tenants: ”There is a spatial designer in the same room with me who has a lot of overlap with my profession. If I have any doubts I can discuss it with him, that helps”. Gaining general knowledge about how to run a business was mentioned thirteen times by five different respondents. These tenants mentioned that the
knowledge and expertise of the other tenants helped improve their own venture. “Yes, I regularly ask others whether they know something I don’t know. I do projects with others in order to be able to offer more expertise to my clients.”
42 5.5 Summary of findings
Which resources does an incubator offer that help a new venture?
In the general findings of this thesis human resources were mentioned most often by the respondents (table 2). Especially the network is mentioned often. According to the incubator members, the incubator facilitated networking indirectly by organising informal meetings but leaving it up to the respondents to use this opportunity (table 3). Most respondents saw knowledge, expertise, skills and talent as one and the same thing summarized as knowledge. When asked about the incubator’s influence on their level of knowledge the respondents
mentioned that it offered workshops but that they were often organised by the member ventures themselves, rather than the incubator. Most knowledge came from internal exchange among members, rather than “outside” instructions or support. Creativity is also offered by the incubators through the building and the atmosphere they create.
The results on intangible resources show some variation in the perception of the
respondents on whether the incubators brand name and image had a positive influence on their venture. Some respondents mentioned that the brand name of the incubator reflected on their own venture, while others mentioned that the image of the incubator differed from their own image. The image of the incubator is described as being “a place that is still in development and that can be influenced by its member ventures”. The old building and mostly second hand materials that are used makes the place look “raw” which attracts a certain kind of venture. This is perceived as positive.
Concerning tangible resources respondents mention that cheap space offered by the incubator makes it easy for new ventures to rent office space. Through this, added benefits such as a better
