The Incubator Investment in Network Events: Does the Business Incubator’s Quality of Programming and Founder Personality Traits Influence Startup Performance?

Abstract

With the rise in business incubation and the competition to attract the most promising startups and demonstrate the best startup performance, business incubators are seeking a deeper understanding of the factors that affect performance and advice on where to spend their money. Business incubator directors are open to new models of incubator management that will drive improved outcomes. This dissertation suggests a new model of incubation that takes into consideration the moderating factors that drive greater participation in network events and greater use of the learning from these events to drive improved startup performance.

Business startup incubation is a successful proposition that demonstrates that an incubator-supported startup is more likely to fuel economic development and have a better chance of surviving and thriving over the long-term than other startups (Fry, 1987; Kuratko and LaFollette, 1987). While most research supports the proposition that incubators promote greater success in startups, only a few studies have addressed the disparity in the quality of programming and participation in programming at incubators.

With the growing number of incubators over the last decade, average spending by incubators is increasing and the variability of the incubator offerings is also increasing. This gives rise to new questions about which incubators provide the best outcomes for success. An important difference between this research and the present literature on business incubation is the emphasis on a new hybrid model of cohort structure, as well as the proposal of other incubator structure approaches to influence event participation, including incubator manager role, cohort culture, and the presence of founder traits of openness and conscientiousness.

Absent from existing literature (Mian et al., 2004 and 2006; Malan and Hammarlund, 2002; Aaboen, 2009; Schillitoe and Chakrabarti, 2010), is a study of the element of the network events, which are important for the growth of the startup founder and the success of the startup. It is important to understand the value of these network events and what factors within the startup founder’s traits or the structure of the incubator will drive greater participation in those events and application of those learnings back to the startups.

This study finds both empirical and statistical support for the use of network events to drive startup participation. The study also shares empirical feedback around the components of the incubator structure that may continue to drive more effective selection of startup cohort participants, and proposes an incubator model that may support better participation and application for future testing.

This research contributes to business incubator literature in several important ways. First, it gives attention to the concept that network events are important program elements within a business incubator to drive participation by a startup founder. Second, it proposes additional selection criteria to consider when evaluating startup founder cohort applicants. In particular, it explores the Big-Five Model of personality traits and openness and conscientiousness trait screening in particular. Third, the model proposes the need for a full-time incubator manager whose primary role is to serve in an advisory capacity and to facilitate the hybrid approach to cohort culture recommended in the new model. Finally, it recommends a hybrid cohort culture model whereby the incubator manager creates a competitive structure to drive participation in network events, but then adjusts the cohort culture structure to collaborative to facilitate greater information sharing across the startups.