Why entrepreneur sourcing matters: the effects of entrepreneur sourcing on alternative types of business incubation performance

Abstract

This paper investigates the effects of entrepreneur sourcing on business incubation performance. We distinguish between internal and external sourcing concerning the organisation that sponsors business incubation activities. Entrepreneurs can be internally sourced, originating from the parent organisation to become startup founders or externally sourced and recruited from outside the parent organisation to lead and build the startup. Both in the literature and incubation practice, the entrepreneur's trajectory is usually taken for granted. We contribute to research by investigating the effects of entrepreneur sourcing on business incubator performance and by offering an alternate categorisation of these performance outcomes. We characterise three basic types of performance outcomes: learning, earning, and returning. During this study, we identified a fourth outcome, namely branding. We examined eight cases at two corporate business incubators. Our findings suggest that internally and externally sourced entrepreneurs affect performance outcomes differently. Contrary to our expectations, we found that internal entrepreneurs contribute to exploratory learning, whereas external entrepreneurs contribute to exploitative learning. Furthermore, our results suggest that internal entrepreneurs generate earnings for the sponsorship organisation and external entrepreneurs contribute to a returning outcome by benefitting society at large. We conclude this study with a tentative conceptual model for future research into incubator design and for managers to align the setup of their incubator programmes to their specific purposes.