Entrepreneurial passion in new ventures: An
empirical study on new venture performance
implications and moderation effects
Eduard van Pagée
a,c, supervised by prof. dr. A.J. (Aard) Groen
a, co-assessed by dr. P.D.
(Paula) Englis
b`
October 26, 2020
Word count: 9741
d
a Faculty of Economics and Business, University of Groningen, The Netherlands bFaculty of management, Berry College, United States
c Author information: MSc. BA Small Business & Entrepreneurship, student number S4183045, Nettelbosje 2, 9747 AE Groningen, NL. E-mail address: b.e.vanpagee@gmail.com
d Including abstract, references and appendix
This research focuses on empirically testing a model of entrepreneurial passion on firm-performance by highlighting the relationship among entrepreneurial passion, market orientation and self-efficacy. By focusing on a very early stage of entrepreneurship where a firm may not even be in existence yet, I tested a curvilinear effect between entrepreneurial passion and new venture performance. This study also examines market orientation as moderating factor on this relation. Moreover, literature suggests that entrepreneurial passion is also moderating the self-efficacy and performance relation and therefore this study incorporates this as well. The data of this research consists of 53 new ventures participating in an accelerator program in the Netherlands. The main findings of this study is that there are indications that market orientation moderates the relation between entrepreneurial passion and new venture performance. The other findings are not significant in our dataset and research setting and therefore this research proposes interesting future research suggestions.
Entrepreneurial Passion, self-efficacy, market orientation, accelerator
Introduction
Research Questions
Based on the identified literature and remaining gaps, we have formulated the following research questions. First, we cover the main topic of this research and add to the scarce empirical literature and inconsistent findings on entrepreneurial passion and actual firm performance. Therefore the first research question is RQ1: What is the relationship between entrepreneurial passion and firm
performance? We have added the concept of market orientation to this relationship given the
contradictions found in the literature and respond to the research call of Cardon et al., (2005) and therefore we state RQ2: What is the role of market-orientation in the entrepreneurial passion and
performance relationship? We also test our data set with the consistently found link of
market-orientation and firm performance. RQ3: What is the relationship between market-market-orientation and firm
performance? Furthermore, we also investigate the concept of self-efficacy which is another personal
characteristic of entrepreneurs. Here, we aim to address the missing empirical evidence of the moderating effect of entrepreneurial passion on the self-efficacy performance relationship. This leads to RQ4: How does entrepreneurial passion moderates the relationship between self-efficacy and
performance? Also with the self-efficacy variable we test the consistently found link to
performance in our dataset and therefore RQ5: What is the relationship between self-efficacy and
Literature review Entrepreneurial Passion (EP)
Entrepreneurial passion has been described as an important driver for entrepreneurs to go over to action, given the mostly uncertain business environment and terrain (Brännback et al., 2006; Cardon et al., 2013). The literature on entrepreneurship demonstrates that entrepreneurial passion is a significant component on other individual characteristics like entrepreneurial identity centrality and self efficacy (Clarysse et al., 2015; Murnieks et al., 2014);, but, there is only scarce research in the literature on entrepreneurial passion and its relation to actual firm performance. Research carried out in the past on entrepreneurial passion found that passion has positive performance implications in attracting funding from investors (Chen et al., 2009), inventing and founding ventures (Cardon and Kirk, 2015) and better growth prospects (Baum & Locke, 2004; Baum et al., 2001). Besides this, there are also other studies related to entrepreneurial passion that focus more on effort and action (Gielnik et al., 2015). However, there are not many studies in the passion field that examine actual firm performance or firm performance in different points in time. Recent research has addressed this issue by taking a closer look at the direct
link between passion and performance (de Mol et al., 2019). This research of de Mol et al. (2019) examined passion within teams in the context of new venture creation and found that higher levels of entrepreneurial passion goes not in hand with higher firm performance. This finding is a contradiction in the literature and further indicates that entrepreneurial passion is not always positively correlated to performance. Similar to research of de Mol et al. (2019), we aim to focus on new venture creation and entrepreneurship in very early stages as well. By doing so, we respond to research calls to further analyse and research ‘when passion can be enabling for entrepreneurs and when it is debilitating’ (Cardon et al., 2005 p. 38). Again, entrepreneurial passion is often perceived as a positive factor in research done on established firms (Drnovsek et al., 2016; Murnieks et al., 2014), but emerging research points out that in certain cases and especially if obsessive, entrepreneurial passion results in lower performance (Ho and Pollack, 2014; de Mol et al., 2018; Adomdza and Baron, 2013). Given the contradiction in entrepreneurial passion found under similar circumstances (de Mol et al., 2019), we argue that higher levels of entrepreneurial passion in early entrepreneurial phases do no constitute higher levels of performance. Instead, in line with past research that obsessive passion is negatively associated with performance (Ho and Pollack, 2014) we argue that moderate levels of passion in new venture creation does impact performance positively. Therefore our first hypothesis is:
H1:Entrepreneurial passion is curvilinear associated to new venture performance
Market Orientation (MO)
passion and performance relationship in new venture creation. Market orientation can be defined as one’s ability to understand the industry and its related customers choosing to buy one’s products or services (Narver & Slater, 1990; Shapiro, 1988). Market orientation is a well-researched concept in the entrepreneurial literature and has been positively linked to performance (i.e., Kumar, 1998; Narver & Slater, 1990). Following the reasoning in our first hypothesis that moderate levels of entrepreneurial passion are positively associated with new venture performance, we argue that having market orientation in the process of new venture creation is crucial for performance. We do so, since entrepreneurial passion is a crucial factor in this process given the high levels of uncertainty and challenges entrepreneurs face while exploiting their entrepreneurial opportunity (Gielnik et al., 2015). However, it seems that entrepreneurial passion, if obsessive, does not result in better performance and business potential (Ho and Pollack, 2014; Adomdza and Baron, 2013; Chen et al; 2009). One could say that if high levels of entrepreneurial passion represents a high internal focus in the inventing, founding and developing stages of new venture creation, which may lead to a product orientation instead of a market orientation (Roersen et al 2012). The measurement of entrepreneurial passion constitutes of questions related to the internal process and excitement one gets from inventing a new venture, but do not constitutes market related questions. Market orientation is a proven concept in the entrepreneurship literature and points out the importance for entrepreneurs to focus on the actual market demand (Narver & Slater, 1990). Especially in the context of starting entrepreneurs (that are often very passionate) it is crucial to find the product-market fit and thus find a customer led strategy (Low et al, 2007 p. 879). It seems that entrepreneurial passion is indeed a very crucial factor in the process of new venture creation since it keeps you going and provides you with persistence to continue (Cardon and Kirk, 2015). However, by logically reasoning one could say that entrepreneurs with high levels of entrepreneurial passion may be very product oriented and less market oriented. Therefore, given the importance of market orientation in early stages of entrepreneurship, we argue that market orientation plays a role in the relationship of entrepreneurial passion and performance. Given the literature on market orientation and its importance to performance (Kumar, 1998; Narver & Slater, 1990), we theorize and suggest that entrepreneurial passion does indeed have successful performance implications if one has market orientation in place. Therefore we propose our second hypothesis:
H2: Market orientation positively moderates the relationship between entrepreneurial passion and new
venture performance
market orientation positively influences a business’s new product success, in particular by maintaining a proactive market orientation. Besides this, Paladino (2007) found that firms focusing on market orientation were more likely to gain a higher market share in the long term. In this study we are aware that market orientation is a firm based measurement and not an individual characteristic of entrepreneurs. However, since the context of this study is focused on entrepreneurship in a very early stage where there may not even be a founding team established, one can say that the entrepreneur and the firm are the same. Therefore, market orientation can be used in this context since it does actually display the entrepreneur. Given the importance of discovering latent customer needs and actual customer demand for new ventures (since an product-market fit is often not established here yet), one can logically expect that having a market orientation results in better firm-performance. Therefore we propose, consistent with past findings, our third hypothesis:
H3: Market orientation is positively related to new venture performance
Self-Efficacy (SE)
As mentioned in the introduction of this study, we also address the personal characteristic called self-efficacy since this concept seems to be very related to our entrepreneurial passion model. Furthermore, we aim to address lacking empirical evidence and literature gaps of self-efficacy in relation to entrepreneurial passion. The concept of self-efficacy is about to what extent an individual can make an assessment of oneself about how well one can perform a certain task required in potential situations (Bandura, 1977; Sherer et al., 1982). Several articles argue that entrepreneurial passion has a moderating effect on the relationship between self-efficacy and performance (Cardon & Kirk, 2015; Shane et al., 2003). First of all, it is important to know that entrepreneurial passion consists of an intense positive feeling and, on the other hand, identity centrality (Cardon & Kirk, 2013). Passion exists of these 2 constructs because these intense positive feelings arise from activities that reflect the identity of the entrepreneur (Cardon & Kirk, 2013). Self-efficacy is probably linked to passion because it ensures that you believe from within that you can do something. Because people naturally like to succeed in the things we do, this should lead to this intense positive feeling and therefore to entrepreneurial passion. However, Cardon & Kirk, (2013) did not find a mediating effect on passion for development. Indeed they argue that more data is needed and that with the same reasoning as above, the effect of entrepreneurial passion is moderating the self-efficacy and performance link. The extensive meta-analysis of Miao et al. (2017) also pointed out that they were unable to test the moderating effect of entrepreneurial passion since there is a scarcity of available data. They urge for new research that further investigate the self-efficacy and performance link with consideration to entrepreneurial passion as moderator. Therefore, we build upon past research and propose our fourth hypothesis:
H4: Entrepreneurial passion positively moderates the relationship between self-efficacy and new
Following the arguments we have used before in this study, we should also test the commonly found relation between self-efficacy and performance in our data since this is the assumption we make in our fourth hypothesis. First of all, according to the literature self-efficacy can lead to task-specific effects which means that if entrepreneurs have self-efficacy, they believe in themselves that they can do a certain task which can give a performance result (Bandura, 1977; Miao et al., 2017). For entrepreneurs this literally means that they set challenging goals for themselves that someone else might consider impossible. They also show determined behaviour and learn quickly from failure. Self-efficacy in the entrepreneurial context ensures that belief is translated into tasks and concrete actions (Miao et al., 2017). Because of this, one can say that the transformation of believes to concrete actions to accomplish goals has direct implications on performance. Given past empirical research findings (Baum & Locke, 2004) and the above arguments we expect a positive relationship of self-efficacy to performance. Therefore, we propose our fifth hypothesis:
H5: Self-Efficacy is positively related to new venture performance
Conceptual Model
Methodology
This research has been built up as van Aken et al. (2007) prescribed. As long as one can do so, the steps outlined by the authors are applied in this research. First of all, we give a definition of the business context and expose the gaps in the current literature concerning this business context. Next, based on these literature gaps, we proceed with the development of a conceptual model and formulate hypotheses that we can test. After this, we will analyse the collected data and interpret the empirical results using the formulated hypotheses. On the basis of these hypotheses, we will then be able to draw conclusions and, more importantly, address the implications of this research.
Research setting and data collection
This research is conducted partly for the benefit of VentureLab North in Groningen. VentureLab North is a business accelerator for start-ups and existing companies in the Northern Netherlands. They offer a cohesive one year business development programme in which they offer weekly trainings, their network and support such as expert coaching and continuous feedback through pitches. In this research we make use of data collected through this accelerator program in which a lot of data has been assembled over the years from the participants in the accelerator program by means of structured surveys, business panel meetings and software. As pointed out by de Mol et al. (2019), data from an accelerator comes with a few advantages for research on entrepreneurial passion. First of all, for the early phase of entrepreneurship (in which we have a particular interest), the activities in which entrepreneurial passion is involved in is of most relevant. These activities are founding, inventing and developing according to Cardon et al. (2009). This way, we are also able to make a distinction between these activities of entrepreneurial passion. Secondly, there is scarce research on entrepreneurial passion, specifically on firm performance outcomes (to our knowledge, only Drnovsek et al., 2016; de Mol, 2019). The unique accelerator data we are using for this study provides an unique opportunity to look to actual new venture performance which is quite interesting.
program over time and do research on the unique accelerator data. The surveys have been conducted during the intake, during the program and after the program. Moreover, other data is collected during the business panels in which participants were obliged to pitch their business to experts, experienced entrepreneurs, coaches or investors. The data were collected by different questionnaires on an individual level and they have been measured several times throughout the program by digital surveys and software. This research has several measurement moments. T0, the measurement of the independent and control variables at the beginning of the program. T1, the performance measurements after 4 months, T2 the performance measurements after 8 months, and T3 the performance measurements after 12 months. We also have data 1 year after the program called the alumni data however, we are unable to use this due to the newness of this accelerator program. Only 2 responses have been collected yet 1 year after the program.
The questionnaires have been send to 208 individuals in the period of 2016 until 2019. These were all the participants in this new accelerator program. After sending several reminders of the questionnaires, 115 individual responses were collected at T0. The individual responses are representing the variables self-efficacy, market orientation, entrepreneurial passion and our control variables. However, for entrepreneurial passion we have 109 datapoints. The original questionnaire also had other questions related to their business and it might be possible that these 6 individuals didn’t finished the survey. For market orientation we have 79 datapoints since this has only been asked to the main person in the business.
Both the independent and dependent variables have been collected seperately and were measured on a different unit of analysis. The independent variables are measured on individual-level and the dependent performance variable is measured on firm-level. Therefore I had to do a matchmaking between these datasets to derive to a final dataset which we are able to use for the data analysis. I matched the 93 ventures of the dependent variable with the 115 individual responses of the independent and control variables. I assigned the individual names of participants to corresponding ventures and this resulted in a final dataset of 53 venture and 62 entrepreneurs. In most cases, only 1 entrepreneur of each venture filled in the surveys. We can assume that this is the main contact person of the venture. However, in some cases 2 or more teammembers filled in the surveys. This resulted in the following overview:
IV responses per venture N 1 IV response 2 IV responses 3 IV responses
Ventures with 1 person 30 30x
Ventures with 2 persons 13 7x 5x 1x Ventures with 3 persons 8 7x 1x
Ventures with 4 persons 2 1x 1x
Table 1: Sample overview and size
I expected that the number of founders and teams were very small given the early entrepreneurial phase we are researching. The dataset showed that 56,6% of the ventures only have 1 person in the team, 24,5% have 2 persons, 15,1% have 3 persons and 3,8% have 4 persons. To match the unit of analysis to firm level, I have reduced the 62 individual responses to 53 individual responses (See: Table 1). Instead of aggregrating the scores or random sampling selection, we decided to reduce the responses by picking the person that represents the main entrepreneur of the venture.
Analysis
For the analysis of this study we first need to verify the constructs used in this research. We will do this with a factor analysis in which we can look for variability in the model. The factor analysis will make sure that the items of passion, self-efficacy and market orientation indeed measure what they say they measure according to the theory. Since all the scales of the items we use are widely acknowledged and have already been empirically tested in the literature, we make use of the normal principal components analysis. After we have done this analysis, the items that do not correspond well (with the construct they should measure) are removed from the analysis. After this factor analysis a reliability analysis is conducted in which we rely on the Cronbach Alpha’s. After the reliability analysis we will conduct the correlation and regression analysis.
Measurements
All variables are derived from validated scales in the corresponding literature. This helps for better validity of the results and comparison. Performance has been measured adequately to the specific context situation.
Entrepreneurial Passion measurement
Entrepreneurial passion is an individual characteristic and can be described as having the ability to “fuel
motivation, enhance mental activity, and provide meaning to everyday work” (Brännback et al., 2006).
In order to measure entrepreneurial passion correctly, this research makes use of the measurement instrument and guidelines for measurement developed and provided by Cardon et al. (2013). These authors have developed a validated set of measures that one could use for research in the field of entrepreneurial passion. The measurement instrument consists of a 7 point likert-scale with answer options varying from 1. Strongly disagree to 7. Strongly agree. Several questions are proposed around the three domains of inventing, founding and developing. For example, the following questions are asked: “Owning my own company energizes me” and “Assembling the right people to work for my
business is exciting”. Entrepreneurial Passion was measured at the start (T0) of the accelerator program.
As suggested by Cardon et al. (2013), we consider the three domains of passion separately and account for the multiplicative effect of the dimensions by multiplying the average IPF (Intense positive feelings) with the IC (Identity centrality). The reliability statistics for intense positive feelings on the three dimensions resulted in Cronbach’s Alpha’s of 0.847 (inventing), 0.812 (founding) and 0.768 (developing).
Market Orientation measurement
orientation proposed by Narver & Slater (1990). These authors have developed a questionnaire to measure the components of market orientation and the possible answers are ranging from 1. Not at all to 7. To a very great extent. Example questions that have been asked in our sample per topic are as followings. For example, for competitor orientation we asked: “Our salespeople regularly share
information within our business concerning competitor’s strategies”, for customer orientation we asked: “Our strategy for competitive advantage is based on our understanding of customers’ needs”, and for
interfunctional coordination we asked: “We share resources with other business units”. Market orientation is measured during the intake of the program. However, one can question whether the interfunctional coordination component is reliable in this study’s context, since our data mainly covers new venture creation and start-ups where ‘other business units’ questions are not relevant. The market orientation scale of Narver & Slater (1990) is often used in established firms. First, I conducted a factor analysis with our dataset which resulted in deleting 1 item of interfunctional coordination and 1 of customer orientation. The reliability statistics for the three dimensions of market orientation resulted in Cronbach’s Alpha’s of 0.867 (customer), 0.802 (interfunctional) and 0.853 (competition).
Self-Efficacy measurement
Self-efficacy is also an individual characteristic and can be described as one’s confidence and belief to perform certain behaviour that potentially results in performance (Bandura, 1977; Sherer et al., 1982). We use the measurement instrument developed by Sherer et al. (1982). These authors have developed a validated self-efficacy scale that is currently widely used in the literature of self-efficacy. This scale is a general psychological self-efficacy scale and is focused on the two types; general self-efficacy and social self-efficacy. This instrument consists of a 14 point Likert scale ranging from 1. Strongly disagree to 14. Strongly agree. For social self-efficacy questions like “It is difficult for me to make new friends” are asked and for general self-efficacy questions like “When I have something unpleasant to do, I stick
to it until I finish it”. This construct has been measured at the intake of the program. The measurement
of self-efficacy of Sherer et al. (1982) consists of about 23 questions of which 14 are reversed asked. First, I recoded these variables and then I ran again a factor analysis on this measurement. During the factor analysis, I was unable to retrieve both components of self-efficacy (social and general). We were able to get a good scale with 11 remaining items to measure general self-efficacy. I deleted 12 items in total. The remaining items resulted in a Cronbach Alfa’s of 0.830 (general self-efficacy).
New Venture Performance measurement
metric for performance. All participants in the accelerator program have to pitch their progress at the so-called business panels every 4 months (T1) , 8 months (T2) and 12 months (T3). Research carried out by der Foo et al., (2005) shows that the pitch and the quality of the business plan offers an alternative form of performance if carried out by expert panellists. Moreover, by having multiple measurement points of performance, we also address the recent call of de Mol et al. (2019) to incorporate more periods of measurement to draw stronger inferences about causality. The ventures participating in the accelerator pitch their idea and business progress every 4 months and receive immediate evaluation on this. In all cases this is judged by persons who are very suitable for this so that it also offers value to the program and the entrepreneur(s). The people evaluating the pitches and business plans are always experienced entrepreneurs, angel investors, venture capitalists, other investors, or start-up analysts. These experts independently evaluate the ventures based on a questionnaire format of 29 questions with a 5 point Likert scale ranging from strongly disagree to strongly agree. The 29 questions do cover business progress and performance in a broad sense, namely, 10 components. These 10 components are the entrepreneur, the product or service, the business, the industry, intellectual property, stage of technology, future innovation, presentation, management team and overall business potential. (See:
Appendix A: Questionnaire). The accelerator has developed all the questions indirectly based on
entrepreneurship literature and investor decision making components. The factor analysis has shown that the questions asked are indeed reliable. However, in this research we are particularly interested in new venture performance and therefore we were only interested in items that measured this performance dimension.
Based on the factor analysis on the questionnaire it became clear that in order to measure new venture performance we should use the following items.
Items component 1 Principal Components Analysis
1. The product or service has a high (potential) customer demand
0.662
2. The product or service is revolutionary rather than just evolutionary
0.638
3. The industry shows great market potential 0.633
4. The potential of this venture is high 0.626
5. The business has a unique selling proposition 0.576 6. The business serves a broad customer base 0.557
7. The business is viable 0.466
Table 2: Principal Components Analysis
(1996); Bliese and Halverson (1998). Since this test needs a fixed amount of panel members to perform, we only take into account cases where we have 3 business panel members and make the assumption that the rest of the data is consistent with this outcome. A high ICC represent low differences in judgments in comparison with true differences. The statistics outcome is that there is a moderate to strong agreement. (ICC 2 = 0.68, ICC 1 = 0.437, F = 3.324, p < .01). I now can proceed to average the individual judgements of the coaches to the firm-level.
Control Variables
In this study we make use of control variables. Control variables are variables that do not play a role in the proposed theory but we assume that they have an influence on the effects we are testing. Because of this we are having control variables and we test whether they correlate with the dependent variable. If this is not the case, we will leave them out of the analysis. The dependent variable is new venture performance and we control for gender, age, level of education and prior experience. This is data that is collected during the same intake (T0) survey.
Multicollinearity
Results Curvilinear effect of entrepreneurial passion (H1)
The first hypothesis is a prediction between entrepreneurial passion and new venture performance. We expected a curvilinear relationship, meaning that little entrepreneurial passion is related to low performance and extreme high amounts are too related to low performance. In order to find any curvilinear effects, I computed the squared entrepreneurial passion variable and did the analysis based on each component (inventing, founding and developing) and time of measurement (t1, t2 and t3). The results are shown in table 3.
Table 3: Results hypothesis 1 (t=1, t=2, t=3)
Market orientation as moderator (H2)
The second hypothesis is about market orientation and its relationship with our first hypothesis and model. I expected that market orientation had a positive moderating effect on the relationship of entrepreneurial passion and new venture performance. In order to measure a moderating effect I used the Z-scores of entrepreneurial passion and market orientation and ran the analysis on new venture performance (t1, t2 and t3). For ease of this analysis I combined the components of market orientation
(customer, interfunctional and competitor orientation) and entrepreneurial passion (inventing, founding and developing). The results are shown in table 4 (t=1) and table 5 (t=2 and t=3).
Table 4: Results hypothesis 2 (t=1)
Based on our first hypothesis results, we expected that entrepreneurial passion does not correlate with new venture performance in our model and dataset. This was indeed the case. For the second hypothesis we predicted a moderating effect of market orientation on this model and for our measurement after 4 months in the program (t=1) we do get support of a significant moderating effect of market orientation on the relation between entrepreneurial passion and new venture performance (T=1, Model 2: β = 0.332,
p=.043).
Furthermore, the hypothesis of market orientation is not significant over time in our sample for new venture performance after 8 and 12 months in the program.
Market orientation and new venture performance (H3)
The third hypothesis was about testing the direct relationship between market orientation and new venture performance. Table 6 displays the regression results and the descriptive statistics for T1, T2 and T3.
The predicted results of hypothesis 3 are not significant for the components of market orientation (Customer, interfunctional and competition orientation). This non-significant result is consistent in all our measurements over time. The reason of putting this hypothesis in the model is to check whether our dataset does indeed follow the consistently found finding that market orientation is positively associated with firm performance. In the discussion section, I elaborate on this result and what implications this has for this research and future research.
Self-efficacy and new venture performance (H4)
Similar to the previous and third hypothesis, I included the fourth hypothesis to control our dataset for a consistently founded relation between self-efficacy and performance. For this study context I have hypothesized that self-efficacy positively correlates with new venture performance and the results are shown in the following table.
The proposed hypothesis for all measurements over time was not statistically supported. There does not seem to be a match between self-efficacy and new venture performance given the high non-significance outcome (0.743, 0.810 and 0.633). This outcome provides room for an interesting discussion. In the discussion section I will discuss the implications of this unexpected outcome.
Entrepreneurial passion as moderator (H5)
In our fifth hypothesis we predicted that entrepreneurial passion is positively moderating the relation between self-efficacy and new venture performance. Similar to the second hypothesis I calculated the Z-scores of entrepreneurial passion and self-efficacy, took the product of this outcome and ran the analysis on new venture performance (t1, t2 and t3). Again, for the ease of this moderator analysis I combined the three components of entrepreneurial passion (inventing, founding and developing). The results of this hypothesis can be found in table 8.
Table 8: Results hypothesis 5 (t=1, t=2, t=3)
The result of the moderation analysis is that the hypothesis is not supported. For all measurements there was not a statistical significant outcome that provided evidence that entrepreneurial passion is moderating the self-efficacy and new venture performance relation.
Incorporated control variables
Discussion and implications
In this study, the main objective was to provide more clarity about entrepreneurial passion and the consequences it has on the performance of new companies. Because this study could makes use of a hard-to-access dataset and unique context, we expected that this study would give more answers to this subject and also reduce the scarcity of literature. Furthermore, we also looked at the variables self-efficacy and market orientation because they are related to entrepreneurial passion and because they contain unanswered literature issues. Unfortunately, the findings show that most of the proposed hypothesises are not supported in our context of early-stage companies. Our overall findings regarding entrepreneurial passion indicates that entrepreneurial passion do not have a linear or curvilinear effect on new venture performance. Also, entrepreneurial passion has no moderation effect on the self-efficacy and new venture performance relationship. Regarding self-efficacy, the findings could not respond to the commonly founded relationship of self-efficacy and performance in our model. This also counts for market orientation and its direct link with performance. Regarding the moderating effect of market orientation on the entrepreneurial passion and new venture performance relationship, the findings indicate there is a significant effect that market orientation is moderating the entrepreneurial passion and new venture performance relationship. This effect is only found 4 months (t1) in the programme of the accelerator, but not after 8 (t2) and 12 months (t3).
Literature implications
we incorporated the commonly found relationship between market orientation and performance on our data (Narver & Slater, 1990; Shapiro, Kumar, 1998). However, this study didn’t obtained this result with our dataset which was quite an unexpected finding. Although the marketing orientation scale of Narver & Slater (1990) is widely used in this field, it is often used in well-established firms and industries. The factor analysis with our data showed that the scale was statistically great, but the question arises now whether this scale of Narver & Slater (1990) is contextually sufficient as well. A study examined by Roersen et al. (2013) did a study on high tech ventures (which matches our data setting) and found that these firms were scoring extremely high on the Narver & Slater (1990) market orientation scale, while in practice these firms were not aware that they do not have customer-focused strategies or fully understand their market. The suggestion is that it is wise to measure market orientation in a different way if the context of high-tech sectors and transition economies (Roersen et al., 2013). If we look at the cases in our sample we see indeed a relatively high market orientation scores corresponding with relatively low venture performance judgments of experts. This finding is also in line with the fact that entrepreneurs tend to be over-optimistic. Although most of the results are not significant, it opens an interesting discussing about scales and context for future researchers in this area.
Furthermore, we also did respond to another call of Miao et al. (2017) to investigate the moderating role of entrepreneurial passion on the relationship between self-efficacy and performance. Several studies argue indeed that there are moderators involved in this relationship (Cardon and Kirk, 2015; Shane et al., 2003). However, in this study we didn’t find any result that indicates that entrepreneurial passion has any influence on the self-efficacy and performance relationship. Similar as we did with market orientation, we first checked whether our data also showed the consistently found relationship between self-efficacy and performance (Miao et al, 2017). However, we didn’t found this relationship in our data. The reason for this might be because it is a general self-efficacy scale developed by Sherer et al. (1982). Although it is widely used, it measures the personal characteristic self-efficacy in a general setting and not necessarily in an entrepreneurial setting. This might be the main reason why self-efficacy doesn’t show any correlation with new venture performance at all. Also this outcome is interesting to take into account in future research on this topic. The most important outcome of this study is that it opens up new perspective for further research on very specific components. These are described in the next section.
Limitations and future research suggestions
study and these numbers drop over time unfortunately. Therefore, we encourage future researchers on these topics to investigate our hypothesises for entrepreneurial passion on a larger and different dataset. Another limitation as described in the literature implications sections above, is that the likert-scales of market orienation and self-efficacy might not be the best scales to use in this early-stage context. Looking back at this research, we would suggest to change the market orientation scale of Narver & Slater (1990) and follow the arguments of Roersen et al. (2013) to adjust the scale if you are dealing with high-tech sectors and transition economies. Regarding the self-efficacy scale, we would strongly suggest future researchers to replicate this research with an entrepreneurial self-efficacy scale (Boyd and Vozikis 1994; Scherer et al. 1989). We are highly encouraging future researchers on entrepreneurial passion to look at the above described limitations incorporated in this research and replicate certain elements with another and larger dataset.
Conclusion
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Appendix A: Questionnaire
Component of business panel questionnaire: Questions:
1. Entrepreneur 1. The entrepreneur has much experience 2. The entrepreneur has entrepreneurial
attitudes
3. The entrepreneur has a good business judgment
4. The entrepreneur has great motivation/commitment
5. The entrepreneur has the necessary social competences
6. The entrepreneur knows his/her strengths and limitations
2. Product or service 7. The product or service is revolutionary rather than just evolutionary
8. The product or service has a high (potential) customer demand
9. The product or service is easily scalable 3. Business 10. The business is viable
11. The business serves a broad customer base
12. The business involves an easy distribution of products
13. The business has a unique selling proposition
14. The business is financially sound
4. Industry 15. The industry shows great market potential
16. The industry involves few substitutes 17. The industry shows little rivalry among
existing competitors
5. Intellectual property 18. Intellectual property can be protected: technology is unique
19. Intellectual property can be translated into many applications
20. Intellectual property is strongly protected by patent(s)
6. Stage of technology 21. Stage of technology is ready to commercialize/has a short time to market 7. Future innovation 22. Concerning future innovation; there is a
robust pipeline
8. Presentation 24. The presentation conveyed confidence and professionalism
25. The presentation showed responsiveness to questions by panelists
26. The presentation triggered and maintained panelists’ interests
9. Management team 27. The management team of this venture is strong and experienced
28. The management team of this venture is complete and balanced
10. Overall 29. The potential of this venture is high Appendix B: Correlation Matrix
3-variable model (H2)
Appendix C: Multicollinearity 3-variable model (H2)
