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Motivations and obstacles to networking in a universitybusiness incubator
Christine E. Cooper • Stephanie A. Hamel •
Stacey L. Connaughton
Published online: 25 September 2010� Springer Science+Business Media, LLC 2010
Abstract Business incubators strive to develop robust business and social networks to
bring value to their resident companies in the form of intellectual and material resources.
Yet, information about what motivates resident companies to participate in networking
activities and the obstacles they face in trying to build effective networks is limited. This
study employs a communication perspective to examine the process of incubation in an
award-winning university business incubator. Using a combination of network analysis and
in-depth interviews, the case study reveals the nature of communication in the internal
network of 18 resident companies and the incubator administrators. Despite being on the
cutting edge of innovations in technology use, study findings reveal face-to-face interaction
in the incubator is predominant. The physical proximity of resident companies at the
incubator influences who they talk to the most, suggesting incubator site design is
important in creating an entrepreneurial environment. The case study also indicates resi-
dent company motivations for networking include a strong desire for social support to help
manage stress, security of membership in an in-group, and increased access to material or
information resources. The primary obstacles residents face to participating in networking
and building relationships with each other include extreme time limitations during the early
start-up phase, lack of ongoing information about other residents, and lack of trust related
to keeping information about innovations and funding sources secure. Implications of these
findings and recommendations for incubator managers for building successful and sus-
tainable communication networks conclude the article.
C. E. Cooper (&)Department of Communication Arts and Sciences, Metropolitan State College of Denver,Campus Box 34, P.O. Box 173362, Denver, CO 80217-3362, USAe-mail: [email protected]
S. A. HamelDepartment of Communication Arts and Sciences, California State University, Chico,Chico, CA 95929-0502, USA
S. L. ConnaughtonDepartment of Communication, Purdue University, 100 North University Street,West Lafayette, IN 47907-2098, USA
123
J Technol Transf (2012) 37:433–453DOI 10.1007/s10961-010-9189-0
Keywords Business incubator � Communication network �Motivations to communicate �Social support � Trust
JEL Classification Y45 � Y80
1 Introduction
As sites of innovation university business incubators have been heralded for their promotion
of entrepreneurship (Zucker et al. 2002), intensive knowledge sharing between the university
and incubator residents (Rothaermel and Thursby 2005), and easy access to key material and
intellectual institutional resources during the vulnerable venture’s start-up stage (Hackett
and Dilts 2004a). The present study uses a communication and knowledge-based view of the
firm (Nonaka 1994; Nonaka and Takeuchi 1995) to examine how residents communicate in
incubators and reconcile their expectations with their experiences in an organization
designed to nurture innovativeness and knowledge creation. McAdam and Marlow (2008)
note university incubators typically pursue three main objectives: technology transfer,
promotion of entrepreneurship, and commercialization of research. Secondary objectives
include nurturing entrepreneurial spirit, civic responsibility, image, and financial backing.
The nurturing and development of business and social communication networks, through
which many of these benefits are accessed, is an important function of incubators and one
they typically highlight in brochures and marketing materials to prospective residents.
Studies of relationship building in incubator networks indicate this formal and informal
communication is associated with incubation success (Hansen et al. 2000; Lichtenstein
1992). Not surprisingly, incubator residents are led to form high expectations of network
dynamism and an organizational culture that is entrepreneurial and inspires innovativeness.
However, according to reviews of incubation literature (Hackett and Dilts 2004a), very little
is known about the actual process of incubation and residents’ expectations and perceptions
of incubator communication once they take up residence. The present study focuses on
communication during the incubation process within an award-winning university business
incubator.
Citing a lack of knowledge about what actually happens during the incubation period
itself, researchers have issued numerous calls for studies examining the ‘‘incubation pro-
cess’’ (Hackett and Dilts 2004a). In their real options-driven theory of business incubation,
Hackett and Dilts (2004b) created a model of the incubation process which specifies the
range of possible incubation outcomes with implications for managerial practice and
policy-making. While the model offers a parsimonious theoretical explanation of complex
organizational phenomena emphasizing access to resources and their application, it does
not capture residents’ experiences of incubator life and how they make sense of it.
According to McAdam and Marlow (2008), we have an incomplete picture of incubator
operation and ‘‘future research needs to consider how proximity and tacit knowledge
establishes trust which underpins successful networking’’ (p. 219). To address this over-
sight, the following study investigates the communication network within the incubator to
determine what an award-winning incubator’s internal network looks like and how resi-
dents reconcile their expectations for networking with their actual experiences in the
incubator. Particular attention is paid to the obstacles residents face in creating an internal
network that is sustainable and contributes ultimately to their success.
The article begins with a review of relevant literature on incubators and communication
networks followed by the research questions posed in the study. Next, the methods used in
434 C. E. Cooper et al.
123
the case study are described. A report of the findings and presentation of a framework
derived from the analysis follow. We conclude with a discussion of the findings and
framework and their implications for academics and practitioners. Suggestions for incu-
bator managers and residents to enhance communication network facilitation and matu-
ration that can be sustained over the lifetime of the firm are included.
2 Review of literature
Worldwide there are approximately 5,000 business incubators (National Business Incu-
bation Association [NBIA] 2007). As of October 2006, over 1,400 business incubators
were operating in North America, up from 550 in 1998 and from 12 in 1980 (NBIA 1998,
2007). Of these, 39% are classified as technology incubators and 20% have sponsorship
from research universities (NBIA 2007). In addition to lower overhead costs and other
financial benefits incubator residents receive, Smilor and Gill (1986) identified four main
entrepreneurial benefits to start-up companies residing in an incubator: heightening cred-
ibility, shortening the learning curve, creating quicker solutions to problems, and gaining
access to an entrepreneurial network. Although business academic literature and the
business popular press have increasingly focused on incubators, few adopt knowledge-
based views of the firm or communication perspectives to examine the communication
networks that serve as the nerve center of the incubation process. A focused review of
business incubator research from 1984 to 2002 advises that the work has ‘‘just begun to
scratch the surface of the incubator-incubation phenomenon’’ (Hackett and Dilts 2004a,
p. 55). In the studies of incubators that address communication (e.g. Udell 1990a, b; Mian
1994, 1997), scholars have focused primarily on the existence and strength of the com-
munication network with regard to resource attainment, but have not detailed the content of
those communicative linkages, resident companies expectations for the relationships they
hope to create, or the obstacles they face in initiating and sustaining them.
2.1 Communication networks
Communication networks have been defined as ‘‘the regular patterns of person-to-person
contacts that can be identified as people exchange information in a human social system
(Farace et al. 1977),’’ (Monge 1987, p. 243). Applied to the organizational level as is
relevant in an incubator context, interorganizational communication networks constitute
the relatively enduring communicative links that exist between organizations (Miller et al.
1995; Oliver 1990). As this definition reveals, communication is central not only to the
concept of networks, but to the concept of interorganizational relationships (IORs), which
more accurately describe the nuances of communication that occur in incubators that
communication network studies have yet to capture. For the purposes of this study, per-
tinent literature on IORs is reviewed to inform our understanding of the communication
networks that lie at the heart of the incubation process.
Two important frameworks for understanding IORs inform the current project. First, in
a grounded theoretical study Miller et al. (1995) describe different types of IORs as varying
along the dimensions of inclusivity and intensity. The inclusiveness of an IOR (Whetten
1981) points to the number and type of linkages that exist to form the relationship.
According to the authors, the following four categories of IORs differ in the degree of their
inclusivity: dyadic linkages (e.g. a pair of organizations), organization sets (e.g. one focal
organization and all other organizations to which it is linked), action sets (e.g. a group of
Motivations and obstacles to networking in a university business incubator 435
123
interacting organizations), and networks (e.g. multiple organizations with various IORs
among them). Intensity is related to interdependence among the organizations and is
indicative of the type of organizational culture incubators strive to create to encourage
entrepreneurial activity and mentoring relationships among resident start-ups (McAdam
and Marlow 2008). Miller et al. adopt Weick’s (1995) conceptualization of coupling in
defining intensity. In their view, loosely coupled organizations within a network indicate
low levels of intensity while tightly coupled organizations suggest greater intensity and a
more interdependent network. Incubators try to create tightly coupled entrepreneurial
networks to facilitate resident success.
Second, Monge and Eisenberg’s (1987) typology of emerging communication networks
that distinguishes between positional and relational networks is useful to the current study.
Whereas the positional view focuses on organizational members’ structural roles as
explanations of communicative practices, the relational perspective attends to the pathways
of communication or the informal ways in which human actors actually communicate. In
adopting the relational perspective, the researcher focuses on the human actors’ ability to
establish and maintain communication links and, subsequently, network structures. To
explore the inclusivity of a network with low intensity and both relational and positional
elements, we asked the following:
Research Question 1 What are the characteristics of the communication network struc-
ture among organizations at the Incubator?
2.2 Nature of communication in networks
The relational network perspective not only highlights the emergent and dynamic nature of
network structures (Monge and Eisenberg 1987), it also encourages researchers to examine
the particular qualities of the communication that emerges. Miller et al. (1995) argue that
communication is a key resource to be exchanged in an IOR, especially to facilitate
coordination. In the context of boundary spanning, Tichy et al. (1979) propose four types
of message content in such interorganizational linkages: the exchange of information, the
exchange of goods and services, attempts to influence and control, and the exchange of
affective expressions such as social support and/or disapproval. Social support is com-
munication that indicates to people they are ‘‘cared for…esteemed and valued…belong to a
network of communication and mutual obligation’’ (Cobb 1976, p. 300). Eisenberg et al.
(1985) elaborate on the distinctions in message content by suggesting that linkages may
also be examined in terms of the ways in which they are exchanged. Eisenberg et al.’s
(1985) term personal linkages,—in which organizations exchange information with other
organizations in a less formal and highly emergent fashion—are more likely to occur in an
incubator setting. Indeed, as Gulati (1995) notes, the common experience that resident
companies share as start-up organizations is manifested in their informal communication
network. With respect to types of messages transmitted through networks, Zeitz (1980) and
Eisenberg et al. (1985) distinguish between material and symbolic or informational types
of exchange. The stakes for the success of these exchanges is high in the incubator
environment where successful networking can sometimes make the difference between
financial success and failure. According to McAdam and Marlow (2008), the expectations
incubator residents have for dynamic informal communication inspired by start-ups’
proximity and the likelihood of tacit knowledge sharing among resident companies may
also be influenced by the trust between the administrative organizations and resident
companies.
436 C. E. Cooper et al.
123
From their inception, incubators themselves have worked hard to translate the benefits
to knowledge management and innovation of working in a close proximal environment
where knowledge sharing and social support among start-ups reign supreme. Nonaka and
Konno (1998) articulate the elements of a desirable incubator organizational culture in
their description of ba, a concept that describes spaces, physical or virtual, that foster
social interaction and promote tacit knowledge exchange. They indicate ‘‘[f]or an
organization to create knowledge, leaders of the organization have to build and maintain
and energize ba by providing enabling conditions of autonomy; creative chaos; redun-
dancy; variety: and love, care, trust, and commitment’’ (Nonaka et al. 2001, p. 27). The
present study seeks to understand resident companies’ experience of an internal com-
munication network at the Incubator. To identify the communication content, the med-
ium through which that communication occurs, and its unique qualities, we pose a
second research question:
Research Question 2 What are the characteristics of the communication among organi-
zations at the Incubator?
2.3 Motivation to network
To a large extent, previous research has explored the relationship of interorganizational
communication networks to both antecedent and outcome variables. For example,
researchers have focused on the informational resources accessed through IORs (Pride
Shaw and Scott 1998), the attributes of IORs (Hall et al. 1977; Hazen 1994), the influences
of IORs (Gray 1985), and the motivations for establishing IORs (Oliver 1990). Oliver
(1990) contends that IORs will proliferate in the future and that ‘‘rigorous adherence to the
explanations of any single theoretical paradigm or contingency is likely to reveal only a
part of the truth about why interorganizational linkages develop’’ (p. 260). Consistent with
Oliver, we present several general network theories that help us frame organizations’
motivations for establishing and maintaining interorganizational networks such as the one
studied here.
Researchers employing aspects of self interest and exchange theories suggest that
individuals choose to create and maintain networks when they are striving to realize their
self-interests (Galaskiewiez 1979) and when they expect to receive some form of return
(Burt 1992). Network exchange theory posits that individuals form linkages based on a
cost-benefit analysis of such resources and maintain these linkages based on the ‘‘fre-
quency, uncertainty, and the continuing investments [needed] to sustain the interaction’’
(Monge and Contractor 2001, p. 458). Utilizing aspects of exchange theory, Zeitz (1980)
argues that organizations develop relationships with other organizations when they per-
ceive a need for what he calls ‘‘external resources.’’ These resources refer not only to
tangible resources such as raw materials, land, personnel, and financial assistance (Zeitz
1980), but also to intangible or symbolic resources such as organizational legitimacy
(Miller et al. 1995; Zeitz 1980), and information (Blau 1964; Homans 1950, 1974). For
example, Wiewel and Hunter (1985) suggest that new organizations in bounded environ-
ments (such as first-year companies in an incubator setting) can benefit from links with
preexisting organizations (such as third-year companies or an incubator’s staff) due to
increased visibility and the legitimacy that being associated with established organizations
provides. Badaracco (1991) elaborates on the notion of information as a resource, sug-
gesting that organizations enter into interorganizational alliances in order to construct what
he terms, knowledge links. Moreover, interorganizational relationships have been found to
Motivations and obstacles to networking in a university business incubator 437
123
help strengthen organizations through mutually beneficial increases in access to material
and informational resources (Eisenberg et al. 1985).
Oliver (1990) presents a typology of six motivations for why organizations engage
in IORs that extends beyond the exchange theory paradigm. She contends that some
organizations are motivated by necessity or the mandate to do so. Other organizations
are motivated to establish IORs by asymmetry or the desire to exercise power over
others. Organizations motivated by reciprocity emphasize the mutual benefits of
coordination and collaboration. A need for efficiency in relation to improving output
related to input is the fourth motivation for establishing IORs. Those organizations
seeking stability consider IORs a mechanism through which to achieve greater pre-
dictability and reduce environmental uncertainty. Finally, organizations who seek
legitimacy enter into IORs in order to improve their image, prestige, or to mimic other
organizations.
Not surprisingly, organizations in vulnerable strategic positions like incubator resi-
dents are more likely to enter new alliances with other organizations (Eisenhardt and
Schoonhoven 1996). Previous research on the outcomes of networks demonstrates why
these relationships are of particular importance to one type of vulnerable organization:
the emerging or start-up organization. First, new organizations operating within a net-
work of similar entrepreneurial organizations find it easier to garner financial resources
in the forms of public subsidies (Colombo and Delmastro 2001) and venture capital
(Brittian and Freeman 1980). Second, organizations in highly active networks have a
greater ability to mobilize resources and obtain information (Yum 1983), particularly
information about their niche market from consultants and research institutions (Wiewel
and Hunter 1985). Third, the prolific flow of information through networks is often
related to the adoption and dissemination of new ideas (Baldridge and Burnham 1975;
Papa 1990). For start-up companies, business process innovation shared among incubator
members could enhance their ability to navigate the pitfalls of each developmental stage.
Finally, and most importantly for start-up companies, interorganizational links are often
associated with high organizational performance (Fulk and Boyd 1991; Monge and
Contractor 2001).
Several structural and relational factors can impede an organization’s ability and
willingness to form and maintain collaborative interorganizational relationships (see
Sharfman et al. 1991). Although some research suggests that organizations forge these
relationships in order to reduce and control environmental uncertainty and turbulence
(Pfeffer and Salancik 1978; Sharfman et al. 1991), other studies have indicated that
interorganizational collaboration may actually heighten the complexity as well as the
environmental uncertainty and turbulence an organization faces (Bresser 1988). For
example, an organization might benefit from an IO collaboration by being able to deal
with its environment more efficiently, but they now have to manage a linkage with
another organization (Provan 1984). Importantly, Monge and Contractor (2001) point
out that an organization will dissolve its interorganizational linkages when it perceives
that the costs of the linkage outweigh the benefits. Considering the different motiva-
tions for entering into an IOR network and the difficulties that may arise, we ask the
following:
Research Question 3 What are Incubator residents’ motivations for networking within the
incubator?
Research Question 4 What obstacles do Incubator residents face to creating and sus-
taining successful networking in the incubator?
438 C. E. Cooper et al.
123
3 Methods
A multi-methodological research design was used in this case study to answer the research
questions posed. A between-method triangulation, with both quantitative and qualitative
methods, was used to increase the likelihood of gathering reliable and valid data (Jick
1983). In-depth interviews, site visits, document review, a survey, and in-depth informal
discussions with different stakeholders associated with the incubator were used to capture
the complexity of the incubation process over a 3 month time-period. Data were collected
in two phases. A communication network survey was administered as the first phase,
followed by individual interviews, site visits, document review of Incubator marketing
materials, and informal discussions with stakeholders. The following section describes the
case study site and the participants, survey, interviews, and methods of analysis used to
interpret the data.
3.1 Research site and participants
The Incubator is part of a ‘‘science and technology commercialization activity’’ admin-
istered by an institute at a southern research university (Incubator flier 1998). Resident
companies at the time of the study represented science and technology fields including
biotechnology, telecommunications, new materials, and computer-integrated manufactur-
ing. As stated in the Incubator’s marketing materials, only those science or technology-
based start-ups seeking to develop a proprietary position in the marketplace were invited to
apply or compete to become a resident company. The Incubator was established in 1989
and by 1997 had graduated 42 start-up companies, created 1,300 jobs, generated $130
million in revenues for fiscal year 1996, and raised $170 million in capital. The Incubator
and its graduating companies have received multiple National Business Incubation
Association awards and were viewed as a cutting edge model incubator at the time of the
study. Visitors from other countries seeking to establish incubators and looking to model
the success of the incubator under study were common and residents often spoke with tour
groups about their experience.
Situated in a new office park, the Incubator was housed in an architecturally modern and
impressive state-of-the art multi-story building with security clearance required at the
entrance. The external walls were glass with a floating office design around the edges of
each floor and an atrium in the center of the building that could be viewed from each level.
Each floor of the building featured a central shared coffee station with access to couches
for seating. While the beverage station was designed to encourage communication among
residents, access to the seating areas was via a modern catwalk-like glass walkway that one
could see through to the floors below. More than one participant in the study mentioned
that while architecturally impressive, it was not conducive to use by people who were
afraid of heights. They had yet to see anyone actually using them and most residents talked
instead in the hallways outside of their offices. The number of employees in the start-up
determined the amount of space they were assigned in the incubator with two of the largest
residents taking up almost an entire floor of the building. Some of the newer starts-ups
consisting of the founder alone had a one-person office and shared the central receptionist,
mailroom, and office equipment with other start-ups.
The incubator director and marketing materials emphasized the building’s character-
istics and benefits it provided smaller start-ups in terms of enhancing resident companies’
image, their stability, and reputation. The large size of the facility, as well as the option to
use the conference room and banquet facilities, was enjoyed by residents when hosting
Motivations and obstacles to networking in a university business incubator 439
123
visitors. Other factors contributing to the positive image of incubator residents were the
connections to the leading research university sponsoring the incubator and the fact that
membership is competitive. The professional staff of the incubator provides in-house
consulting to the resident companies related to financing, accounting, marketing, and
public relations. In addition, mentoring in business operations and other areas is common
with broad support functions including job placement of student interns with resident
companies (Incubator Fact Sheet 1997). At the point of our study, the incubator housed 18
high-tech companies ranging in size from one employee to 34 employees and was run by
one administrative organization and two subsidiary support organizations that jointly
managed the incubator.
3.2 Procedures
For phase one, a communication network survey was developed to establish a baseline
description of the structural make-up of the internal incubator network. According to
Rowley (1997), ‘‘the purpose of network analysis is to examine relational systems in which
actors dwell and to determine how the nature of relationship structures impacts behaviors’’
(pp. 893–894). Given the study’s emphasis on how the incubation process occurs and
resident companies networking expectations and experiences in the incubator, the quan-
titative data collected for the study was limited to determining the density of the internal
network and distance between incubator organizations (see ‘‘Analysis’’ for definitions of
these terms).
A representative from the administrative arm of the Incubator reviewed the survey to
improve internal validity and approval was received by a university departmental Internal
Review Board process prior to administering it at the Incubator. Copies of the survey
instrument were placed in the mailboxes of the 18 resident companies and representatives
of the administrative and two subsidiary support organizations that jointly manage the
Incubator. Each employee in the 21 organizations received a personalized survey in a
manila envelope and was asked to return the network survey within 10 working days.
Respondents were informed that their participation in the study was voluntary and that only
the research team would have access to the completed survey.
The total possible number of respondents was 179 incubator employees. Forty-two
usable surveys were ultimately collected (one was dropped from the study because the
respondent did not indicate his/her name or organization making network analysis
impossible). Additional attempts were made to increase the study’s response rate
through repeated visits to the Incubator by members of the research team and two
additional reminder e-mails from the Incubator staff. No other questionnaires were
returned.
The second phase of data collection involved conducting face-to-face interviews
which constitute the primary data used in the analysis presented here. To coordinate the
interviews, one member of the research team phoned all 18 CEOs of the resident
companies, as well as the acting director of the Incubator’s administrative organization,
and asked if they would be willing to participate in a 30-min interview. Thirteen resident
company executives and a representative of the administrative organization for the
Incubator agreed to participate. All interviews took place on the Incubator site and lasted
between 15 and 40 min. At the interviewee’s discretion, the interviews took place either
in a private meeting room or in the interviewee’s office. All interviewees gave the
research team permission to audio-tape the interviews which were later transcribed for
data analysis.
440 C. E. Cooper et al.
123
3.2.1 Instrumentation and analysis
Along the left side of the survey each incubator organization (18 resident companies and
three administrative support organizations) and every employee within that organization
were listed. Respondents were asked to check the boxes in each column next to every
person’s name, outside of their own organization, to indicate who they communicate with,
how frequently, the channels used, the communication content, and their satisfaction with
the current level of communication with each person. Frequency of contact was measured
in a column indicating ‘‘number of times you communicate with each individual in a
typical work week.’’ The categories reflecting the content of the communication was pulled
from network literature and asked respondents to indicate any of the following five
choices: ‘‘business-related,’’ ‘‘technical,’’ ‘‘brainstorming,’’ ‘‘social,’’ or ‘‘other’’ that
applied. Finally, the channel used to communicate was measured by having respondents
check one or more of four types: ‘‘face-to-face,’’ ‘‘phone,’’ ‘‘e-mail,’’ and ‘‘memo.’’ These
values were aggregated to represent organizational-level data (using average scores) and
were entered into the network analysis software program UCINET (Borgatti et al. 1992).
The background/demographics section appeared at the end of the questionnaire and
included the respondent’s ethnicity, tenure with the organization, the typical hours they
worked, and whether or not they worked weekends. Given the data of interest in the survey
was that needed to establish baseline frequency and type of organization-level commu-
nication, limited individual demographic variables were collected. The survey was
designed to inform the analysis of the in-depth interviews.
Using the UCINET network analysis program, the research team assessed the com-
munication network at the Incubator in terms of the frequency of communication, network
density, and distance between organizations. Frequency, type, and multiplexity of com-
munication content and of communication channel used were also calculated. The data
were run with all 21 organizations, including the administrative and support organizations.
3.2.2 Interviews
After a preliminary analysis of the survey data, the research team prepared a semi-struc-
tured interview protocol from which to conduct the 13 interviews. The protocol was
designed to probe the content of interactions between resident companies as well as to
determine the expectations residents had for their experience and what motivated inter-
action between resident companies. This type of interview format gave interviewees more
control over the discussion and allowed for more description by participants (Lindlof and
Taylor 2002).
The interview data were analyzed in two phases. Using a coding scheme based on the
research questions, the investigators began with three broad categories from which to code
the data: ‘‘indicators of communication network structure,’’ ‘‘expectations and experiences
networking in the incubator,’’ and ‘‘motivations for and obstacles to networking.’’ These
categories reflect only those linkages found between resident companies at the Incubator. A
fourth category ‘‘the administrative organization’s relationship to resident companies in the
communication network’’ was added prior to analyzing the interview with the Incubator
administrator.
Coding reliability was addressed with a three stage process. Initially, two members of
the research team separately coded the first interview using the established general cate-
gories and then met to discuss whether they were coding similarly. After verbally checking
and verifying the criteria for the coding scheme, the researchers coded the remaining
Motivations and obstacles to networking in a university business incubator 441
123
twelve interviews separately. After completing the initial coding process, the researchers
met to reconcile any overlaps or discrepancies in coding. All such instances were verbally
reconciled and changed to a mutually agreeable code. In phase two, a thematic analysis
was completed for each of the broad categories. As recommended by Strauss and Corbin
(1998), evidence in the form of key phrases or statements was identified to support or
refute the relationships identified in selective coding. Following recommendations from
Glaser and Strauss (1967), the transcripts were reread repeatedly using a constant com-
parative method to generate themes within each category. These themes are reported along
with the data from the survey which follows.
4 Results
4.1 Respondents
Only those companies in residence at the Incubator were included in this study (virtual
organizations and those residing at other locations were excluded). From a potential
respondent pool of 179 employees who work in the Incubator, 42 people took part in the
project (response rate 24%). However, the survey and interview data were analyzed at the
organizational level to compare incubation experiences across organizations with 76% of
the resident companies participating in the survey and 66% participating in the interviews.
4.2 Communication network structure
The first research question sought to determine the characteristics of the network structure
between resident organizations at the Incubator. To answer Research Question 1, network
distance and density were calculated for the internal incubator network. Network scores for
each of these measures are presented along with a description of each analysis. Separate
analyses were conducted for frequency of network communication for the 21 total incu-
bator organizations (including the three administrative organizations) and for the 18 res-
ident start-ups only. Respondents were asked to indicate the number of separate times in a
typical week they communicated in any way with another individual at the Incubator.
Responses ranged from ‘‘0’’ to ‘‘97.’’ Frequency of communication between organizations
was calculated by averaging the individual employee scores for each organization, which
were then entered as data for the network analysis.
4.2.1 Network distance
The distance between two organizations is the length of the shortest path between them
(Monge and Eisenberg 1987). Network distance in the present study refers to the average
number of links or steps that separate Incubator companies from each other. Distance
scores between all 21 organizations varied from 1 to 2. The administrative organization in
the Incubator and the two support organizations were each directly connected to all of the
other organizations at the Incubator. Generally, resident companies at the Incubator have to
make two steps (i.e., go through one other organization) in an effort to reach another
organization. Not surprisingly, the organizations serving in the role of liaison between
organizations are one of the three administrative support organizations in the Incubator.
Given the Incubator’s reputation for creating dynamic close-knit relations among resident
442 C. E. Cooper et al.
123
companies, it is surprising that an intermediary is used when resident companies talk to
each other.
When the three administrative organizations serving as liaisons are removed from the
analysis, distance scores between resident companies at the Incubator varied from 1 to 4.
Most residents did not interact with at least half of the other organizations at the Incubator.
For those resident companies who do interact, the average number of steps to reach their
desired communication target is two. Tracking network distance at different levels of
incubator network maturation would be an important indicator for incubator managers to
know, suggesting when they should increase opportunities for direct communication
between residents.
4.2.2 Network density
The density of a network is the total number of ties between organizations divided by the
total number of possible ties. When all 21 organizations are included in the analysis, the
density of the communication network at the Incubator is 19% indicating that 19% of all
possible network connections exist among the companies. However, the density among
resident companies (excluding the administrative organization and two support organiza-
tions) at the Incubator is 16%. A drop from 19 to 16% of all possible connections is a
reduction of almost 1/6th of the occurring linkages in the full network.
The overall structure of the network at the Incubator highlights two key findings. First,
that communication is more direct, more frequent, and more inclusive for the adminis-
trative organizations. The mission of these organizations to provide resources and the
need of resident companies for those resources make them pivotal in the existing inter-
action. Second, although the density scores indicate fewer than 20% of the possible
communication linkages are occurring, a network does exist even without the adminis-
trative organizations. The resident companies have reason to communicate with limited
formal interdependent goals and with the presence of some degree of competition
between them.
4.3 Communication characteristics
The second research question sought to identify the type of communication that occurs
between organizations at the Incubator. To answer Research Question 2, both network
frequency data and qualitative interview data were analyzed. The network analysis
explored the content and channel of the communication, while the qualitative analysis
revealed five descriptive categories.
4.4 Networking content and preferred communication channels
The most commonly discussed topics of conversation between all organizations at the
Incubator were business-related issues (49% of the total communication indicated by
respondents). This was followed by social issues (33%), brainstorming ideas (11%), and
technical issues (7%). Channel use within the incubator differed considerably. Survey
results indicated face-to-face communication (62%) was the most commonly used
communication channel followed by phone calls (19%), e-mail (16%), and memos
(3%).
Motivations and obstacles to networking in a university business incubator 443
123
4.5 Interviewee reports of internal incubator network characteristics
To better understand the characteristics of the internal communication network at the
Incubator, the interview data were analyzed revealing five broad categories: (a) tenor, (b)
channel use, (c) place (e.g., location), (d) situation, and (e) content (see Table 1).
4.5.1 Tenor
The tenor of communication was primarily cast as casual, supportive, and spontaneous.
One respondent indicated ‘‘the relationship with the companies is all real casual.’’
Although casual, the interaction that maintains these relationships can provide members
important support. Several examples even suggest a collegial organizational climate: ‘‘I
know this company received some positive media attention which spurred me to pop my
head in and say, ‘Hey, what’s going on? Congratulations,’ and ‘it’s cool.’’ This second
example of support also references the spontaneous nature of interaction: ‘‘If I see them
[members of other organizations] out there, I’ll just go over and sit down and say, ‘Tell me
how you’re doing. What can I do to help?’—but it tends to be spontaneous.’’ Alternately,
when the communication focused on business, respondents characterized it as serious.
4.5.2 Channel use
Interviewee comments regarding communication channel use indicated more face-to-face
communication than any other type. One interviewee stated, ‘‘All the things I’ve done with
people internally have been face-to-face.’’ Another reference to face-to-face communica-
tion also indicates telephone and e-mail are used. ‘‘Either you see somebody in the hall or
you do a phone call or e-mail.’’ Telephone usage was mentioned more than e-mail.
Although these companies emphasize Internet usage within their individual business
operations, computer mediated communication does not appear to be frequent among the
resident companies or desirable. Several comments suggest that the building layout and
close proximity of many offices increases face-to face communication.
4.5.3 Place
Indications of place explained the high frequency of face-to-face communication. Res-
ident members interact in the hallway, cafeteria, elevator, bathroom, and at the coffee
machine. In response to the question, ‘‘Where does communication take place?’’ one
interviewee said, ‘‘A lot of it is just walking by each other in the hall.’’ Another
Table 1 Characteristics of theinternal communication network
Characteristic Key descriptions
Tenor Casual, supportive, spontaneous
Channel Primarily face-to-face
Place Common areas (hallway, cafeteria,elevator, coffee machine)
Situation Coffee breaks, meals, formal events, working
Content Business, social
444 C. E. Cooper et al.
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indicated purposely spending time in common areas in order to ‘‘run into other people.’’
He continued, ‘‘I would strike up conversations. That has been and still is the primary
way that I network or communicate with other people.’’ The following response points
out the function of office location within the incubator in bringing resident members
together. ‘‘People I do see from other companies are the people I share the coffee
machine with the most, so, from that standpoint, the physical location definitely impacts
who I communicate with.’’ Being on different levels of the building appeared to impact
networking for a number of residents. Another interviewee indicated he would like to
interact with a high-profile incubator resident known for his experience with the patent
process who resided on the first floor. Yet, because of his location on a different floor,
and the extreme time constraints he works under, he revealed he probably would not get
around to initiating contact. The same interviewee indicated he would rely on formal get-
togethers arranged by the incubator administrator for these types of interactions. The
interviews reveal that interaction between companies in the incubator was desired by
residents but limited due to various obstacles. One respondent revealed, ‘‘I have received
a couple phone calls from companies that are in the Incubator that have heard about
what we’re doing and they’ve called to say ‘Hey, I have an idea,’ or ‘Let me hear your
thought about this and that.’’’
4.5.4 Communication situation
Next, the concept of situation is addressed. Although situation is similar to the idea of
place, it is distinguished by a focus on who is present and the nature of the activity. Several
communication situations highlighted were coffee breaks, meals, formal events, and
working. Diverse aspects of each situation could affect the nature of the resulting com-
munication. For example, communication that takes place over meals in the Incubator
cafeteria may last long enough for people to discuss multiple topics. Both the length of the
meal and the public location of the cafeteria afforded more opportunities for different
people to be involved in conversations. The people present in one conversation might
include a business partner, someone on the administrative organization’s staff, and a new
acquaintance. One interviewee described the grueling work hours typical for entrepreneurs
at the incubator that prevent them from networking more aggressively or formally with
each other. Ironically, given the state-of-the art building they worked in that would appear
ideal for collaborative activities, incubator residents ended up visiting with each other
while standing around waiting in the parking lot on Friday and Saturday nights for their
take-out delivery dinners from various local restaurants. The interviewee bemoaned the
fact that the security clearance required to enter the building prevented delivery people
from entering, yet this obstacle created an opportunity for residents to finally get a chance
to interact with each other.
4.5.5 Content
The final subcategory, communication content, was characterized by interviewees as pri-
marily business or social. Business communication included collaboration on several types
of projects: web site design, video work, and business planning. Types of communication
that were business oriented included brainstorming, strategizing, feedback, and the giving
and receiving of advice. Social communication among residents ranged from small talk to
support on a variety of topics and issues.
Motivations and obstacles to networking in a university business incubator 445
123
4.6 Motivations for networking within the incubator
The third research question focused on residents’ motivations for networking within the
Incubator. This question was answered through qualitative analysis of the interviews and
reveals a strong need for social support during the high-stress lifestyle of start-ups’ early
years, the security of membership in an in-group, and increased access to material or
information resources. Interviewees expressed a belief that a well-developed communi-
cative network could facilitate a sense of shared experience and provide what they deemed
as necessary social support. For example, interviewees expressed the desire not to feel
‘alone’ during the sometimes tumultuous experience of working in a start-up company, ‘‘I
think it’s [communication] desirable because a lot of times you feel like you’re out there on
your own.’’ Another interviewee wanted a ‘united front’ for security against a common
enemy. The belief was that more interorganizational network communication could change
the equation from one small company against the world to ‘‘small companies in the
Incubator against the world.’’ One interviewee clarified another unifying factor when
stating, ‘‘We have common pain in a lot of ways, so that’s a very binding issue.’’
Interviewees also indicated they wanted to develop a communicative network in order
to have more access to the knowledge and problem solving skills of others. ‘‘We all have
very similar problems and being able to share the problems with counterparts at other
companies on a confidential basis would be very useful.’’ One interviewee hinted at the
benefits of sharing information in order to reduce uncertainty for start-up organizations in
the turbulent high-tech environment. As a member of a small organization, the respondent
indicated that there are ‘‘companies here who are 30, 40 [number of employees], and
they’ve been through all the stuff that we’ve been through and they can easily help us out.’’
Another interviewee echoes the value of sharing information: ‘‘So somebody can help or
you can help someone else, you know, together you could go farther than alone.’’
4.7 Obstacles to achieving desired communication
The fourth research question focused on the obstacles residents face to creating and sus-
taining a dynamic internal incubator network. This question was answered through qual-
itative analysis of the interviews and three major themes were revealed. Life-cycle stage,
lack of knowledge about residents, and lack of trust were attributed as the three major
obstacles to creating and sustaining a dynamic internal incubator network. Table 2 presents
motivations for and obstacles to networking.
Table 2 Motivations and obstacles to networking in a university business incubator
Motivations fornetworking
Rationales Obstacles tonetworking
Rationales
Social support Stressmanagement
Time limitations Time commitment during start-upphase is overwhelming
In-groupmembership
Identity,security
Lack of residentinformation
Need ongoing, updated information to identifysimilarities among residents
Access toresources
Capacitybuilding
Lack of trust Need for security is high during innovation process(patents pending, information about funding sourcesand prospects need to be kept from competitors)
446 C. E. Cooper et al.
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4.7.1 Life-cycle stage
The primary circumstantial reason incubator residents did not seek each other out is
related to the intensity of certain stages of each business’ life cycle. Specifically, the
turbulent nature of start-up companies appears to impact members’ use of time and areas
of focus. Lack of time for external communication was a reality. Time that might have
been used for networking was needed to focus on day-to-day survival issues. Several
examples include: ‘‘Time is by far the critical factor here. They (incubator administrative
organization) could do things everyday but we’d just never be able to go.’’ ‘‘To sit down
for an hour and talk about certain things, it feels like requesting a lot at this point—I mean
an hour means a lot at this stage.’’ In response to the question of whether networking
occurs casually in the hallway, one incubator resident replied, ‘‘But that would take 2 min
and we don’t have that much time.’’ One interviewee highlights the need to focus inter-
nally: ‘‘If we can’t launch this product, we haven’t got a company. So we’re not going to
worry about [Company X].’’
4.7.2 Lack of ongoing information about residents
Another situational condition cited as an inhibitor to communication was that people
simply did not have the contacts, knowledge, or opportunity to seek out other organi-
zations. One interviewee’s comment indicated isolation within the Incubator: ‘‘Part of it
is, right now, we know generally what most of the companies are about, but we don’t
necessarily know what they’re doing.’’ Whether the cause of this isolation was attributed
to the administrative organization or resident companies, most of the interviewees agreed
the situation was problematic. One respondent pointed to the Incubator staff’s responsi-
bility to share information about other organizations in the Incubator with the member-
ship. ‘‘If we could get those kinds of things [information about other companies]
delivered to us then it could trigger that I should go talk to this company.’’ Another
example supports evidence of this lack of contact, yet highlights the member’s respon-
sibility, ‘‘There might be a company that has problems similar to my own, but I don’t
know, I won’t know until I network more.’’ Another interviewee asked ‘‘[Company Y]
management has a specific set of challenges that they have to meet, and what advantage is
it to know what (Company Z) is doing?’’ This question reflects the belief that interaction
is not necessary, however, it is possible this belief is tied to the lack of knowledge
companies have about one another.
4.7.3 Lack of trust
While interviewees expressed a desire for more frequent and sustained communication
with other resident companies, many cited a lack of trust as one reason they avoid sharing
information. Interviewees indicated they did not always feel secure that information shared
with other residents would be treated with confidentiality and they feared that sharing
information might come back to harm them. For instance, one interviewee indicated, ‘‘I
wouldn’t share information about work… things about work I would never discuss, who
my contacts are, and who I’m working with, what companies I’m working for.’’ A similar
fear was expressed by another resident, ‘‘I can’t afford to air my dirty laundry because they
might hear something about it and then may not be willing to invest in us, or they may
spread that information to someone else.’’
Motivations and obstacles to networking in a university business incubator 447
123
5 Discussion
These findings highlight the obstacles to successful networking within a technology
incubator. Member organizations must balance a primary tension between independence
and connectedness. Independence is required to maintain focus on company goals, protect
proprietary information, and survive the demands of a start-up company’s tempo. How-
ever, connectedness is desirable to learn from others’ experiences and expertise, to assuage
the isolation of intense focus, and to take advantage of the social support that can relieve
stress caused by the business realities of new companies. The following section explores
possible applications of four conclusions drawn from the data. In addition, limitations of
the study and directions for future research are presented.
5.1 Applications
5.1.1 Relinquish control to shorten the distance
The first conclusion addresses the role of administrative organizations in an incubator. To
decrease the distance between resident companies, Incubator managers should: Initiatenetwork contacts among residents, remove obstacles to enhancing network connections,and provide motivations to sustain them—while continuously relinquishing control of theprocess. As evidenced in the literature review, survey results, and interview findings,
access to vital resources is necessary to the survival of start-up organizations and include
the network contacts that can be found in the incubator setting. Incubator administrators do
resident companies a disservice when they attempt to formally manage the communication
and serve strictly in a liaison role. Rather, providing opportunities for informal commu-
nication, including thoughtful site design that recognizes the realities of entrepreneurial
life, abundant social networking opportunities, and encouraging distributed leadership
within the Incubator can all increase the likelihood of knowledge-sharing in this entre-
preneurial setting.
Our findings suggest that, despite the fact that resident companies are housed under one
roof, the administrative organization—the Incubator staff—must take steps to facilitate
conditions under which organizations might develop relationships without formalizing
these interactions. As Nonaka and Toyama (2002) suggest, improvisation is at the heart of
innovating. Organizational environments that can incorporate improvisation from their
distributed leadership models to their building layouts are more likely to engender positive
attitudes about knowledge-sharing. Similarly, the learning model view of an incubator
embraces the concept of a ‘‘community of practice’’ (Wenger 1998). Peters et al. (2004)
suggest that the ‘‘interaction among the tenants and owners of an incubator may help in
shaping the learning of each entity in that group due to a shared sense of understanding of
the overall objectives of their community’’ (p. 89).
5.1.2 Social support
Although the transfer of material and knowledge resources may be adequate for resident
company survival, social support among resident companies appears crucial for optimal
incubator performance (Provan and Milward 1995). Therefore, our second conclusion
highlights the role of social support: Social support is a highly valued component ofincubator membership. In some ways residents of an incubator are like a community of
448 C. E. Cooper et al.
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organizations that share common interests or characteristics. They form a social support
network which can facilitate better understanding of problems, serve as a resource, and
mobilize other needed resources (Kadushin 1983). These networks help members deal with
stress more effectively. The results of our study encourage researchers to focus on the
function of supportive communication in an incubator setting. Perhaps it is the combination
of supportive communication in a turbulent start-up environment with the material
resources that an administrative organization in an incubator provides, which contributes
most significantly to these organizations’ survival.
5.1.3 Life cycle adaptation
Our third conclusion addresses the influence of resident companies’ life cycle on the
likelihood of desired and successful networking in an incubator. The stage of a residentcompany’s development as well as the level of its members’ experience affect the type,depth, and frequency of interaction that is desired with other companies and with theadministrative organization in a business incubator. The results of the current study reveal
that companies with longer tenure in the Incubator or that have members with previous
entrepreneurial experience expressed less desire for frequent interaction with resident
companies. Those same companies, however, indicated that upon entering the Incubator,
they would have benefited from heightened interaction with the administrative organiza-
tion and other resident companies.
There is no single strategy for incubator manager’s communication with resident
companies. Becker and Gassmann (2006) clarify that the ‘‘process of incubation is about
the engagement of the incubator with the new venture and the possibility to change [the
nature of that engagement] over time due to the new venture’s current life cycle’s needs’’
(p. 476). Better understanding of an organization’s profile (e.g., goals, needs, stage of
development, member experience) can lead to more effective communication strategies
with that organization. In fact, the concept of organizational stage or experience could be
incorporated into the evaluation of a potential resident company by incubators’ adminis-
trative organizations. This could lead to specialized incubator designs by either selecting
resident companies that would likely desire a similar level of interaction or customizing
communication with individual resident companies that have diverse needs. Adopting a
customized approach to incubator design that communicates to residents that their fears
and needs are being addressed may help administrators reduce the lack of trust some
residents appear have at early stages of the incubation process. Using direct communi-
cation to identify these fears and acting quickly to address them may go a long way in
creating and sustaining the kind of entrepreneurial and transparent communication network
residents expect to enter.
5.1.4 Physical proximity
The fourth conclusion emphasizes the influence of proximity on communication networks:
Physical proximity is a primary catalyst for communication in the resident members’network. Proximity can encourage communication among organizations by increasing the
potential for organizational members to cross one another’s paths naturally (Monge et al.
1985). Because resident organizations have the independence of residents of a neighbor-
hood, they do not need to frequently interact with one another to conduct business.
However, ‘‘living’’ in the same place can lead to their meeting, which provides an
opportunity to interact and discover commonalities (Homan 1950). Results of this study
Motivations and obstacles to networking in a university business incubator 449
123
support the importance of proximity, with both survey and interview data indicating the
primary channel of communication is face-to-face. In multiple interviews, ‘‘common
areas’’ were highlighted as the place to meet others for business or social interaction. The
study findings also extend recent work by McAdams and Marlow (2008) who found
contextual factors such as proximity enhance tacit knowledge sharing and trust among
resident companies. While this research represents important first steps to better understand
the nature of the incubation process itself, future research on the development of swift trust
in incubator settings would provide important direction for incubator staff and resident
companies seeking to maximize their experience.
5.2 Limitations and future directions
Because of a less than optimal individual response rate, our analysis may under-represent
communication at the Incubator. However, this limitation only applies to the quantitative
network analysis, which was conducted at an organizational level through aggregation of
individual responses. The mixed methodology had a compensatory effect with interview
data allowing for exploration of more in-depth individual perceptions of the network.
The current project points to several intriguing areas of future research pertaining to
incubators in particular and to communication networks in general. First, researchers
should build on this project’s communicative focus by exploring incubator residents’
perceptions of the communicative network at various stages of their organizational
development. As our data indicate, life cycle stage appears to be a determining factor in the
desire for networking among resident companies. Interviewees indicated they desire more
interaction with other residents at the early stages of their residence and that this dimin-
ishes somewhat at later stages in the business life cycle. Further study may describe this
influence and explicate critical periods or triggers for differing levels of network con-
nection. In their systematic review of business incubation research, Hackett and Dilts
(2004a) also outline the importance of developing a process model to explain how and why
the incubation process facilitates incubatee development. Grounding this model in resi-
dent’s communication needs at different life cycle stages would be an important contri-
bution to the literature. Second, future research should also explore social support
mechanisms in networked organizations which share limited formal interdependent goals.
This characteristic may lessen the motivation for members to provide social support;
however, the current study suggests that there is great need for social support in an
incubator setting. This line of research could determine factors that indicate differing levels
of need and explore the facility of administrative organizations to serve as a catalyst for
such networks.
The incubator setting provides a unique venue in which to assess the communicative
characteristics of interorganizational networks. Increasing numbers of technology incu-
bators and increasingly complex types of collaborative-competitive interorganizational
relationships necessitate a continued focus on these phenomena. By focusing on how
successful resident networking can be adapted and sustained throughout the incubation
life-cycle and beyond, researchers can continue to make sense of how to maximize
incubator experiences for residents that compliment the social networking they are doing in
the public sphere.
Acknowledgements We would like to thank Heather Osterman for her assistance with data collection aswell as Craig Scott and multiple peer and journal reviewers for their helpful comments on previous versionsof this manuscript.
450 C. E. Cooper et al.
123
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