motivations and obstacles to networking in a university

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

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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.

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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

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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.


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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


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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?


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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


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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.


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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


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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


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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%).


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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


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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.


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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)


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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.’’


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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


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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


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.


123

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motivations and obstacles to networking in a university

Documents

communication perspective

nature of communication

incubator managers

incubator administrators

robust business

purdue university

abstract business incubators

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