Sustainability-oriented incubators: nurturing our future heroes? : A single case study research.

(1)

Sustainability-oriented

incubators: nurturing

our future heroes?

MASTER THESIS WITHIN: Business Administration NUMBER OF CREDITS: 30

PROGRAMME OF STUDY: Strategic Entrepreneurship AUTHOR: Arne Ibo Stein and Rein te Winkel

TUTOR:Duncan Levinsohn (PhD) JÖNKÖPING May 2021

A single case study research.

(2)

Master Thesis in Business Administration

Title: Sustainability-oriented incubators: nurturing our future heroes? Authors: Arne Ibo Stein and Rein te Winkel

Tutor: Duncan Levinsohn (PhD) Date: 2021-05-24

Key terms: Sustainability-oriented incubator, sustainable entrepreneurs, entrepreneurial stages, effectuation, incubator tenants, support system

______________________________________________________________

Background: Environmental problems are a worrying phenomenon, and there is a call

for action. One way to face these problems lies in sustainable entrepreneurship. There is an increase in sustainability-oriented incubators supporting these sustainable entrepreneurs on their entrepreneurial journey, using various support systems. However, there is little research available about the support systems sustainability-oriented incubators offer, the importance of these support systems, and the influence of entrepreneurial stages.

Purpose: With our study, we provide sustainability-oriented incubator managers with

insights into the importance of different support systems, the frequency in which they are offered and the role of different entrepreneurial stages. This allows sustainability-oriented incubators to support their tenants better and, therefore, positively influence sustainable entrepreneurship.

Method: A single case study method has been applied by using a mixed-method approach

of qualitative semi-structured interviews and a quantitative questionnaire which was filled in prior to the interviews by the participants. In total, nine participants were interviewed, consisting of seven incubator tenants and two incubator managers.

Conclusion: This research has found a high level of importance and frequency of

business model support and market research support, irrespective of the different entrepreneurial stages. This implies a constant reiteration process from sustainable entrepreneurs, demanding a strong-intervention role from the sustainability-oriented incubator. Furthermore, this research has found the shortcomings in using the effectuation model for analysing entrepreneurial stages and suggests a different application.

(3)

Acknowledgement

We would like to express our gratitude to everyone who supported us throughout writing our Master thesis at Jönköping University in Sweden.

Firstly, we would like to thank the sustainability-oriented incubator Noorderwind for enabling us to conduct our research. Noorderwind provided us with the very interesting experience of conducting interviews with their inspiring incubator tenants and the incubator managers. Therefore, we would also like to thank our research participants who took the time to speak to us regardless of being busy and thus contributed to this research. Secondly, we would like to thank our supervisor Duncan Levinsohn for his guidance, advice and highly constructive sessions throughout our Master thesis process. We also would like to take the opportunity and thank our seminar group for the valuable feedback during the seminars. Moreover, we would like to thank Jönköping University for preparing us for the master thesis throughout the years, and the great time we had here. Lastly, we would like to thank family and friends for their support throughout this process.

Arne Ibo Stein Rein te Winkel

(4)

List of Figures

Figure 1: Dynamic model of effectuation adapted from Sarasvathy (2008)……… 17

Figure 2: Conceptualisation theoretical framework………. 32

Figure 3: Effectuation model tenant one……….. 69

Figure 4: Effectuation model tenant two……….. 71

Figure 5: Effectuation model tenant three……… 72

Figure 6: Effectuation model tenant four………. 72

Figure 7: Effectuation model tenant five……….. 73

Figure 8: Effectuation model tenant six………... 74

Figure 9: Effectuation model tenant seven………... 75

Figure 10: Adaptation effectuation model from stages to logics………. 78

Figure 11: Importance support systems per stage……… 79

Figure 12: Conceptualisation theoretical framework and findings……….. 80

Figure 13: Build, measure, learn (Based on Frederiksen & Brem, 2017)……… 81

List of Tables

Table 1: Most commonly used support systems (Rice, 2002). ... 26

Table 2: Entrepreneurial stages support factors and support systems ... 30

Table 3: Quantitative data importance ranking (incubator manager) ... 48

Table 4: Quantitative data importance ranking (incubator tenants) ... 51

Table 5: Overview of most important support systems (incubator managers and tenants)... 54

Table 6: Overview largest support importance differences (incubator managers and tenants) .. 55

Table 7: Quantitative data support frequency ranking (incubator manager) ... 60

Table 8: Quantitative data support frequency ranking (incubator tenants) ... 62

Table 9: Overview most frequent provided support systems (incubator managers and tenants) 64 Table 10: Quantitative data largest support frequency differences ... 65

Table 11: Frequency of most important support system support ... 65

List of Abbreviations

NW Noorderwind

B2B Business to business

(7)

1. Introduction

_____________________________________________________________________________

This chapter explains the relevance of our research and the urge for action and starts with company testimonials, followed by the background, which provides an overview of our research topic. It is followed by the research purpose and research questions explaining why this research is conducted and needed.

______________________________________________________________________

Every year around eight million tons of plastic ends up in the ocean, even though plastic can be used to produce durable products (Lang Leve Plastic, 2021). To combine these factors, Lang Leve Plastic was founded one and a half years ago using recycled plastic bottle cups to produce plastic bars that can be used to create products such as chairs. Lang Leve Plastic offers workshops and also sells construction kits to create products out of these plastic bars (Lang Leve Plastic, 2021).

Semilla Sanitation Hubs provides self-contained mobile circular sanitary units consisting of a toilet, a shower and washing facilities to transform waste streams into clean drinking water, nutrients and biogas. In addition, the company, founded in 2016, provides mobile sanitary units to refugee camps, disaster zones, festivals and other public events (Semilla Sanitation Hubs, 2021).

Onze Markt is a democratic food brand that provides its customers with a transparent overview of the products, guarantees a fair price for suppliers and customers and ensures respect for the environment and animals. The community can vote for the next products, and Onze Markt ensures that these fair products can be found in the supermarket (Onze Markt, 2021).

These three companies are all attending Noorderwind, an impact-driven business incubator in Rotterdam, the Netherlands, with sustainability as its focus. Noorderwind helps these startups to realise their ideas (Noorderwind, 2021). These are only three examples of companies leaving sustainability-oriented incubators all over Europe every year, and the number of green startups is increasing (Olteanu et al., 2020). For example, 21% of German startups can be defined as green due to the positive impact of their products and services on the environment (Olteanu et al., 2020).

(8)

1.1 Background

The current environmental problems, climate change, resource depletion, and biodiversity loss are significant societal challenges facing the world and achieving these changes will only happen with big and structural changes in many different industries (Geels, 2011). To confront these challenges, in their 2015 report, the UN stressed the environmental challenges the world is facing. These challenges resulted in the 17 Sustainable Development goals (SDG's) that should transform the financial, economic and political systems in the world (United Nations, 2015). According to Klofsten et al. (2016), this UN report shows a worrying trend, and it needs actions and a substantial boost in promoting green businesses.

Cohen and Winn (2007) argue that one way to solve environmental challenges is by entrepreneurial opportunity. We agree with this and add that this entrepreneurial opportunity lies in sustainable entrepreneurship. There are many different ways to define sustainable entrepreneurship (Levinsohn, 2013). We have decided to use Patzelt & Shepherd’s (2011) terminology, stating that the discovery, creation, and exploitation of opportunities to create future goods and services that sustain the natural environment can be defined as sustainable entrepreneurship.

There are different types of entrepreneurs, such as aspiring entrepreneurs, nascent entrepreneurs, business founders (Rotefoss & Kolvereid, 2005) and expert entrepreneurs (Sarasvathy, 2008). Nascent entrepreneurs are at the beginning of their entrepreneurial venture creation process and have the capacity and potential of becoming successful entrepreneurs but lack experience and practical understanding of the involved processes (Karataş-Özkan & Chell, 2010). Therefore, we are focussing on nascent entrepreneurs since we are interested in the earliest phases of entrepreneurship.

Nascent entrepreneurs are influenced by supporting factors: cognitive characteristics, human capital, and social capital (De Carolis et al., 2009). These supporting factors help

the nascent entrepreneur become a successful entrepreneur. The question that arises is how the entrepreneur gets from nascent to successful. The venture creation process has received attention from scholars, and multiple perspectives exist on how this process works. Two main opposing perspectives are the linear perspective and the iterative perspective. The linear perspective constitutes models such as the Segmentation,

(9)

Targeting and Positioning model (Goodman et al., 2019) and Reynolds and White's four stages (1997). Iterative models such as effectuation currently provide the basis for many entrepreneurs' perspectives on the venture creation process (Bortolini et al., 2018; Yang et al., 2019). Sarasvathy (2008) created the effectuation model, which encompasses multiple stages an entrepreneur goes through, with the entrepreneur revisiting these stages along the entrepreneurial journey. Due to the popularity and the wide use of the effectuation model, we look at this perspective throughout our thesis.

The different entrepreneurial stages in the effectuation model are called: means available, possible course of action, interactions, stakeholder commitments, and new means, new goals. Means available stands for identifying the entrepreneur’s current set of means, resulting in possible course of action: things an entrepreneur can do and believes are worth doing. The next stage is interactions, which involves using the entrepreneur’s network. Some of these interactions can result in stakeholder commitments. Each new commitment results in two cycles: new means result in an expanding cycle of resources, and new goals result in a converging cycle of transformations (Sarasvathy, 2008). To support early-stage startups, many entrepreneurial ecosystems exist around the world to positively influence the survival rate of startups. According to Cohen (2006), an entrepreneurial ecosystem contains startups and businesses with a common geographical location and aim at sustainable development through new firm creation. There are different types of entrepreneurial ecosystems, such as business incubators and accelerators, that provide their tenants (startups attending the incubator) with different value propositions and provide synergies (Volkmann et al., 2019). However, we decided to only focus on business incubators because they start hosting companies from the earliest stage onwards (Hackett & Dilts, 2004).

Business incubators provide young companies with support, consultancy and technical services (Schwartz & Hornych, 2010). Moreover, Klofsten et al. (2016) presented that business incubators can support entrepreneurship in its infancy by providing support and services to boost growth and survival rate among startups. Nowadays, business incubators and sustainability are becoming more intertwined, and incubators have an increased interest in supporting sustainable startups (Klofsten et al., 2016).

(10)

Sustainability-oriented incubators can be described as incubators that are committed to offering green business support to tenants (Fonseca & Chiappetta Jabbour, 2012). They are in many ways similar to regular incubators, whereas the type of network and knowledge the sustainability-oriented incubator could offer differ since they are specialised in green companies (Bank & Kanda, 2016; Klofsten et al., 2016).

According to Bergek and Norrman (2008), there are multiple support systems, which support the incubator tenants: pre-incubation, infrastructure, business support, mediation and graduation. Pre-incubation includes business incubators’ selection criteria based on the team or the entrepreneur (Bergek & Norrman, 2008), whereas infrastructure includes office facilities and administrative services (Bergek & Norrman, 2008; Peters et al., 2004). Bergek and Norrman (2008) mentioned that business support includes services such as business development and entrepreneurial training. Mediation consists of providing the tenants with an external network (Bergek & Norrman, 2008; Peters et al., 2004). Lastly, graduation includes business incubators’ support for successful market entry and assistance to obtain funding (Bergek & Norrman, 2008).

Since sustainability-oriented incubators and regular incubators show many similarities, previous authors have used the regular incubators’ support systems interchangeably with sustainability-oriented incubators’ support systems (Bank et al., 2017; Bank & Kanda, 2016). However, currently, there is little literature available on support systems for sustainability-oriented incubators, which leads us to our research problem.

1.2 Research problem

Sustainable entrepreneurship is going to be an important tool to help solve our environmental problems. Recently, sustainability-oriented incubators have been established to provide support to sustainable entrepreneurs. Despite this important role, sustainability-oriented incubators are an under-researched concept (Bank et al., 2017; Fonseca & Chiappetta Jabbour, 2012; Klofsten et al., 2016). At this moment, it is not clear what kind of support sustainability-oriented incubators offer their tenants and which support systems are the most important for the incubator tenants. Two separate studies have marked the beginning of researching this (Bank et al., 2017; Bank & Kanda, 2016). However, more in-depth case study research is needed to understand the importance of different support systems (Bank et al., 2017).

(11)

Business incubators exist to help nascent entrepreneurs become successful entrepreneurs. Therefore, it is important to consider how this process goes and how the entrepreneurial needs might change during this process. Many entrepreneurs use effectuation-related models as a guide through the entrepreneurial process (Frederiksen & Brem, 2017; Yang et al., 2019). Business incubators could use the same models to assess entrepreneurial needs. Currently, it is unclear whether the effectuation principles are actually applicable to the venture creation process in an incubator context. This entrepreneurial stage perspective can be valuable for business incubators since it might provide insights into their tenants' needs in different stages, allowing them to better tailor their support systems to the tenants.

1.3 Research purpose and research questions

Our research contributes to the literature by researching the most important support systems offered by sustainability-oriented incubators. Furthermore, we examine the frequency in which this support is provided. By doing this, we create a perspective on how a sustainability-oriented incubator can organise its support systems and what is deemed most important by sustainable entrepreneurs. We also research the applicability of the effectuation model on sustainable entrepreneurs in an incubator context and analyse the different needs in different stages.

By conducting our research, we learn which support systems are experienced as most important by the incubator tenants, ensuring that sustainability-oriented incubators meet the tenants’ needs. By doing this, they can positively influence the entrepreneurial journey of the tenants. Furthermore, by supporting sustainability-oriented incubators with our findings, we indirectly support sustainable entrepreneurs, providing a small contribution to solving the planet’s environmental problems. This leads to the following research questions (RQ):

RQ1: What are the most important support systems for sustainability-oriented incubator tenants?

RQ2: To what extent do tenants receive the support they find important?

RQ3: To what extent is Sarasvathy´s effectuation model applicable for analysing entrepreneurial stages in business incubators?

(12)

2. Theoretical Framework

_____________________________________________________________________________

In this chapter, the existing literature is reviewed, and the different aspects and subtopics of our research are combined to give a theoretical overview of our research topic. Firstly, sustainable entrepreneurship is introduced, followed by nascent entrepreneurship and its support factors. Afterwards, the effectuation model is presented, followed by entrepreneurial ecosystems and business incubators. Lastly, we present the conceptualisation.

_____________________________________________________________________________

2.1 Sustainable entrepreneurship

Cohen and Winn (2007) argue that the market imperfections that caused environmental degradation also provide key opportunities for new technologies, business models and sustainable entrepreneurship. Entrepreneurship and new ventures are recognised as effective tools to tackle social and environmental problems (Hall et al., 2010). Sustainable entrepreneurship can be defined as "the discovery, creation, and exploitation of opportunities to create future goods and services that sustain the natural and/or communal environment and provide development gain for others" (Patzelt & Shepherd, 2011, p. 632).

According to Hall et al. (2010), there is an increased awareness for the fundamental transformation of business practices to reduce environmental and societal impact. Sustainable entrepreneurship can slow degradation, improve ecosystems, and enable founders to obtain entrepreneurial rents while improving environmental conditions locally and globally (Cohen & Winn, 2007). Tilley and Young (2009) argue that the only entrepreneurs that can truly be called sustainable entrepreneurs are the ones that balance their work in three key areas of wealth generation such as economic, social and environmental wealth. That aligns with Schaper (2010) that green entrepreneurship ventures green "intentionally" and not by accident which gives a clear distinction of sustainable entrepreneurs from "accidental ecopreneurs".

In general, there are different terminologies available, and Schaper (2010) argues that there is much debate on which terminology to use. Levinsohn (2013) comes to a similar conclusion in his literature review and argues that there is no agreement among scholars

(13)

on how green, sustainable or sustainability entrepreneurship is defined. However, several authors suggest that "green" may be used interchangeably with "sustainable" (Levinsohn, 2013). Gast et al. (2017) come to a similar conclusion after reviewing 114 Scientific articles on sustainability-related entrepreneurship. Moreover, Gast et al. (2017) argue that all these labels refer to entrepreneurs and businesses that base their business on environmentally friendly, sustainable, green principles and are searching to minimise their impact on the environment. This also aligns with Schaper (2010), that the green entrepreneur's activities should positively affect the natural environment, contribute to a more sustainable future and have a positive net environmental impact. According to Cohen & Winn (2007), sustainable entrepreneurship is not necessarily an entirely new form of entrepreneurship but rather an extension of existing forms of entrepreneurship. All green entrepreneurs practice some form of entrepreneurship, meaning they take a risk, face unpredictability and a possibility of failure, just like "regular" entrepreneurs (Schaper, 2010). Also, Volkmann et al. (2019) add that sustainable entrepreneurship clearly differs in terms of purpose and impact on regular entrepreneurship.

We have decided to focus on sustainability in an environmental context. For this reason, we will use the sustainable entrepreneurship definition from Patzelt & Shepherd (2011), stating that actions including the discovery, creation and exploitation of opportunities to create future goods and services which sustain the natural environment can be defined as sustainable entrepreneurship.

2.2 Nascent entrepreneurship

Rotefoss and Kolvereid (2005) distinguish between different types of entrepreneurs: aspiring entrepreneurs, nascent entrepreneurs, and business founders. Hence, an individual that already registered a business as a legal entity, put their own money into the business or received the first payment can be identified as a business founder. Aspiring entrepreneurs can be described as individuals who prefer to be self-employed, whereas nascent entrepreneurs try to establish their business (Rotefoss & Kolvereid, 2005). Therefore, nascent entrepreneurs are at the beginning of the entrepreneurial venture creation process. They have the capacity and potential of becoming a successful entrepreneur, but they lack experience and practical understanding of the involved processes (Karataş-Özkan & Chell, 2010). That also matches with Hopp and Sonderegger (2015), that an individual or team can be defined as a nascent entrepreneur if they intend

(14)

to start a new venture and have already carried out actions to start the business and expect to own a share in the company without having another operational business. Hence, they are involved in a startup that is not operational yet. Reynolds (2010) stated similar nascent entrepreneurs' characteristics and mentioned that an operationally nascent entrepreneur should not have experienced a positive cash flow for more than three months. Dimov (2010) concluded that a nascent entrepreneur pursues uncertain opportunities, and not all the opportunities result in an operating business. Thus, opportunities constantly get evaluated, and the ones that lack promise get disregarded to focus on the promising ones. We agree with Karataş-Özkan and Chell (2010) definition of nascent entrepreneurship since they clearly describe that nascent entrepreneurs are at the beginning of the venture creation process and lack practical understanding and experience. Due to this lack of practical understanding and experience, nascent entrepreneurs need support in the entrepreneurial process. In the following chapter, support factors for nascent entrepreneurship will be listed.

2.3 Support factors nascent entrepreneurship

At this moment, research in the field of nascent entrepreneurship has largely focused on supporting factors that help nascent entrepreneurs (Mergemeier et al., 2018). Based on the literature, we identified three main support factors within the field of nascent entrepreneurship: cognitive characteristics, human capital, and social capital. These support factors contribute to nascent entrepreneurs becoming successful entrepreneurs. In the following subchapters, these support factors will be described.

2.3.1 Support factors: Cognitive characteristics

The first group of support factors for nascent entrepreneurs is cognitive characteristics. In the following subchapter, different cognitive characteristics that influence nascent entrepreneurial performance are listed and described. Based on the literature, we identified self-efficacy, goal setting, entrepreneurial perseverance, illusion of control and risk propensity as cognitive characteristics influencing nascent entrepreneurs.

Self-efficacy

Self-efficacy refers to the extent to which the individual believes in organising and effectively executing certain actions, which will produce predetermined achievements

(15)

(Bandura, 2001). Thus, nascent entrepreneurs with high self-efficacy can be more effective nascent entrepreneurs due to more planning activities undertaken (Brinckmann & Kim, 2015). On the contrary, other research suggests that high self-efficacy entrepreneurs are likely to have an optimistic bias, resulting in underestimating risks and overestimating success chances (Cooper et al., 1988; Palich & Ray Bagby, 1995). However, this opportunity confidence can also positively affect new venture creation (Dimov, 2010).

Goal setting

In the context of nascent entrepreneurs, the goal-setting theory suggests that new ventures that undertake business planning before acting will improve startup performance (Shaver, 2004). In their empirical analysis, Hechavarria et. al. (2012) found that entrepreneurs that often set specific goals are more likely to continue startup activity. The authors move on to suggest that nascent entrepreneurs with formalised goals have a higher possibility of identifying unworthwhile business opportunities faster.

Entrepreneurial perseverance

An entrepreneur’s perseverance is a cognitive characteristic that can lead to persistent behaviour and continued efforts by the entrepreneur, despite certain constraints like resistances, setbacks and uncertainty of outcomes (Markman & Baron, 2003). Nascent entrepreneurs with a high degree of entrepreneurial perseverance tend to engage more in business planning activities, which is beneficial for nascent entrepreneurship (Brinckmann & Kim, 2015).

Illusion of control

The illusion of control is the person’s expectancy for success, while the actual chance of success is disproportionally lower than the person imagines (Langer, 1975). The illusion of control influences a person’s assessment of whether the person’s knowledge, abilities and skills match a given situation (De Carolis et al., 2009). The authors argue that the illusion of control can affect the judgment on an entrepreneur's viability, therefore influencing a new venture's progress (De Carolis et al., 2009).

(16)

Risk propensity

Risk propensity is described as a person’s proneness to circumvent risks, which changes peoples' perspective in uncertain conditions (Kahneman & Tversky, 1979). Several studies have investigated the link between entrepreneurial behaviour and risk propensity, but the outcomes have been ambiguous (De Carolis et al., 2009). In certain circumstances, an entrepreneur's risk-propensity is higher than that of non-entrepreneurs (Stewart & Roth, 2001). De Carolis et al. (2009) suggest that, despite the scepticism from scholars, individuals with a high risk propensity can make greater progress in a new venture since they tend to see situations as less risky, giving them more motivation in the venture creation process.

2.3.2 Support factors: Human capital

The second support factor for nascent entrepreneurship is human capital. According to Dimov (2010), an individual’s knowledge and skills are represented in human capital. The human capital perspective has been used to predict entrepreneurial outcomes. Davidsson and Honig (2003) argue that tacit and explicit knowledge are an important part of human capital. Moreover, discovering new opportunities is more often pressured by individuals with a greater level of human capital. Hence, human capital increases the likelihood of becoming a nascent entrepreneur, whereas it does not automatically lead to successful entrepreneurial discovery and exploitation (Davidsson & Honig, 2003). According to Brinckmann and Kim (2015), human capital is shaped in two ways: through education and work experiences.

Education

Brinckmann and Kim (2015) suggested that formal education enhances nascent entrepreneurship due to more planning activities. On the contrary, Davidsson and Honig (2003) argue formal education is not a success factor in nascent entrepreneurship. Work experience

Previous work experience can be divided into entrepreneurial and industrial experience. Entrepreneurial experience includes the previous entrepreneurial experience of starting and managing a venture and helps to navigate through that process. However, it does not guarantee a successful venture creation (Dimov, 2010). Nevertheless, the previous

(17)

industrial experience can provide the entrepreneur with the advantage of being aware of important sources of information and hence can positively influence the nascent entrepreneurial decision-making (Dimov, 2010). That matches with Hopp and Sonderegger (2015), who argue that pre-startup experience and intention influence nascent entrepreneurship and successful venture creation.

2.3.3 Support factors: Social capital

The third support factor is social capital. De Carolis et al. (2009) define social capital as the goodwill and the resources that emerge from the individual's social relationship network. A more collective perspective is taken by Adler and Kwon (2002), describing social capital as the goodwill created by social relations that can be deployed to facilitate action.

Social capital is not necessarily a single definition; it can also be multidimensional (Nahapiet & Ghoshal, 1998). The social network refers to the amount of formal and informal ties that a certain individual has. Furthermore, relational capital encompasses the nature of these personal relationships that people have developed (Liao & Welsch, 2005). The authors elaborate on relational capital, arguing that it refers to entrepreneurs being able to collect emotional, informational and physical support in the creation of a new venture.

Entrepreneurial discovery is influenced by parents and friends having a business, and individuals receiving this encouragement are more likely to start the entrepreneurial journey (Davidsson & Honig, 2003). For this reason, entrepreneurs should develop a broad network with interfirm and intrafirm relations. Furthermore, the likelihood of successful venture creation is positively influenced by being a member of business networks (Davidsson & Honig, 2003).

In the literature, two types of social capital have been identified: bonding social capital and bridging social capital. Bonding social capital focuses on the collective network relationships, and bridging social capital focuses on the individual (De Carolis et al., 2009). Adler and Kwon (2002) distinguish between bonding and bridging social capital as bridging focusing on external relations and focus on internal relations belongs to bonding forms of social capital. A higher level of bonding social capital positively influences the likelihood of starting a company (Davidsson & Honig, 2003). When the

(18)

actual startup process starts after the mere entry, human capital decreases in relevance and bridging social capital becomes more important (Davidsson & Honig, 2003).

Social capital can help the entrepreneur get access to certain information. This information is a critical component of entrepreneurial opportunities (Shane & Venkataraman, 2007). Furthermore, social capital can accelerate the quality, relevance and timing of information (Adler & Kwon, 2002). Besides information, individuals can gain access to financing (Davidsson & Honig, 2003) and commitment from their social networks (De Carolis et al., 2009).

The support factors listed in this chapter encompass general entrepreneurial needs. However, since sustainable entrepreneurship differs from regular entrepreneurship in multiple facets (Patzelt & Shepherd, 2011), it is important to consider the specific entrepreneurial needs sustainability entrepreneurs have.

2.3.4 Support factors for nascent sustainable entrepreneurs

In prior research, multiple support factors for sustainable entrepreneurs have been identified. Muñoz and Dimov (2015) grouped the following support factors for successful sustainability-oriented venture creation: prior environmental knowledge, sustainability orientation, entrepreneurial intention for sustainability, desired value creation, perceived social support, and perceived business support.

Prior environmental knowledge

According to Patzelt and Shepherd (2011), prior knowledge about environmental problems greatly influences finding opportunities on how the environment can be sustained. Hence, an entrepreneur is more likely to recognise a sustainable opportunity in this field (Patzelt & Shepherd, 2011). Therefore, prior knowledge has a considerable influence on entrepreneurial opportunities. Individuals seeking to become entrepreneurs will be more likely to take advantage of opportunities within their field since they already possess knowledge in that field (Shane, 2000).

Sustainability orientation

According to Walley and Taylor (2002), green orientation can be based on motivation or a market opportunity or even a combination of both. Further, the category sustainability

(19)

having these attributes wants to change the world and is aiming for a sustainable future (Walley & Taylor, 2002). Entrepreneurial intention is influenced by sustainability orientation, but the influence varies for different groups (Kuckertz & Wagner, 2010). Moreover, business experience does not positively influence the combination of sustainability orientation and entrepreneurial intention because it rather hinders that process (Kuckertz & Wagner, 2010).

Entrepreneurial intention for sustainability

Generally, entrepreneurial intention to start a venture depends on the factors of desirability, propensity to act and perception of feasibility (Fitzsimmons & Douglas, 2011). In addition, entrepreneurship with a focus on sustainable development of the society and the market requires a large amount of sustainable innovation (Schaltegger & Wagner, 2011).

Desired value creation

According to Gibbs (2006), if a venture creates value from the economic, social and ecological point of view and hence combines opportunities and intentions, it can be called sustainability-driven. Sustainability entrepreneurs are seen to be in the lead of a new form of capitalist development to help to address negative environmental impact (Gibbs, 2006). Within sustainability entrepreneurship, wealth itself and wealth creation should also include both aspects of social and environmental wellbeing (Tilley & Parrish, 2009). Perceived social support

Cultural factors have a big influence on entrepreneurship and sustainability (O’Neill et al., 2006). Social norms influence the founding rate of environmentally-oriented ventures and impact it by itself or in combination with state initiatives (Meek et al., 2010). Depending on the cultural context, it is important to not only create value in terms of market penetration and profit but also aligned with cultural and environmental components (O’Neill et al., 2006).

Perceived business support

Environmental investments can pay off for the companies if environmental opportunities are pursued. Thus, the eco-labelled product can be a way to gain a competitive advantage (Orsato, 2006). Also, according to Ambec and Lanoie (2008), increased interaction of

(20)

companies’ environmental performance can lead to increased economic performance. Hence it can lead to a win-win situation, but that is not always the case. Nevertheless, increased company expenses for environmental protection can be regained elsewhere and can positively influence the company performance (Ambec & Lanoie, 2008). Mitchell et al. (2010) suggest that companies should use profitable, environmental and social value systems to generate a long-time positive effect for the stakeholders.

Nascent entrepreneurial needs for sustainable entrepreneurs have been researched and listed, but the connection to the entrepreneurial process is missing. The list provides basics of how the entrepreneurial process might look, but not with what is most important and to what extend supporting factors change, based on the entrepreneur's current activities. To research this, we decided to explore the relationship between nascent entrepreneurial stages and nascent (sustainable) entrepreneurial support factors.

2.4 Effectuation

In literature, the entrepreneurial process is often seen as a linear process. For example, the Segmentation, Targeting and Positioning (STP) model, a frequently used model, defines the venture creation process in four steps: research, developing offering, delivering value and managing marketing (Goodman et al., 2019). This model argues that venture creation goes through certain predefined steps. A similar approach has also been used by Reynolds and White (1997), who argue that a nascent entrepreneur goes through four stages in the venture creation process: conception, gestation, infancy, and adolescence.

Both these models have the commonality that they are linear, meaning an actor moves through these steps one by one, usually not walking back or skipping steps. We argue that these types of models should not be used to analyse entrepreneurial stages in our context. Many modern-day entrepreneurs use iterative stages based on theories like design thinking and effectuation (Frederiksen & Brem, 2017), which are in essence different to causation-oriented and linear stages because entrepreneurs can revisit stages, iterating their business ideas. We argue while linear models might fit for scholars, iterative stages are suited to entrepreneurs.

This iterative, design thinking oriented approach is a relatively new but popular approach to the entrepreneurial process. A growing amount of entrepreneurship theory argues for

(21)

this evolvement of startups, claiming startups evolve their business model, constantly iterating, experimenting and learning (Frederiksen & Brem, 2017). One of the most recent movements in this theory has been the Lean Startup (Bortolini et al., 2018). The Lean Startup has become standard practice worldwide, used as a reference by entrepreneurs on launching and maintaining a startup (Yang et al., 2019). Even though many different theories exist with the same basis of rapid-iteration, experimenting and learning, the Lean Startup’s success is unprecedented (Bortolini et al., 2018).

Despite the frequent use of the Lean Startup by entrepreneurs, we did not deem it suitable to use it in a theoretical context. In essence, the Lean Startup is not a scientific model but a book with subjective experience and anecdotal evidence, often limited to certain companies, industries or types of businesses (Frederiksen & Brem, 2017). After researching the scientific background of the Lean Startup, Bortolini et al. (2018) and Yang et al. (2019) conclude that the Lean Startup method has strong links to the effectuation theory by Sarasvathy, thereby bridging the gap between theory and practice for looking at the entrepreneurial process. The Lean Startup’s view on entrepreneurial thinking matches closely with the effectuation theory: “The match between the two is so close, that it is tempting to regard the Lean Startup as the practical implementation of Sarasvathy’s research” (Frederiksen & Brem, 2017, p. 181). Effectuation has become an influential theory for new venture creation and is highly used (Kitching & Rouse, 2020). Effectuation embodies a theory of venture creation in uncertain conditions (Sarasvathy, 2001). As a part of the effectuation theory, the effectuation model has been created. In the effectuation theory, Sarasvathy (2008) clearly distinguishes between two sets of logics: causation and effectuation. In causation logic, an entrepreneurial opportunity should be taken step-by-step. Sarasvathy (2008) argues that this process is not necessarily causal but is actually an effectuate process in many examples. Causation logic takes a particular effect as a given thing and primarily focuses on selecting different means to create the given effect. Effectuation logic, on the other hand, has a given set of means. The selection process is among the possible effects that can be created with the means that are available (Sarasvathy, 2008).

According to Sarasvathy (2001), startups are created through processes of effectuation. When they fail (a frequent occurrence), these startups will have gathered fewer costs than causation-process startups. Furthermore, successful firms have a focus on forming

(22)

alliances and partnerships in their early years, as opposed to more causation-oriented processes like strategies, market research, planning, forecasting and others.

To test the effectuation theory, Sarasvathy has interviewed a group of 30 expert entrepreneurs. Based on the findings and follow-up research in the years after the initial research in 2001, the effectuation model was created. The effectual logic that Sarasvathy found mainly guided expert entrepreneurs, whereas nascent entrepreneurs tend to be guided by causal logic (Sarasvathy, 2008). Nevertheless, we argue that the effectuation model is highly relevant to research the entrepreneurial stages nascent entrepreneurs go through. Nascent entrepreneurs might not be experienced yet, but by adopting the effectuation model, learning from expert entrepreneurs and following the steps taken, nascent entrepreneurs can become expert entrepreneurs. Many nascent entrepreneurs already follow effectuation-inspired methods, as mentioned before, which gives another argument for why this model is effective for analysing nascent entrepreneurial stages. This process of nascent entrepreneurs becoming expert entrepreneurs by using effectual logic is also outlined by Sarasvathy (2008, p. 134).

Sarasvathy’s model can be utilised in different contexts: design, decision-making logics, and the venture creation process are examples. In the context of our thesis, we decide to test the effectuation model from the perspective of the venture creation process. Taking this perspective means entrepreneurs are in one stage at the same time, as opposed to other perspectives, where multiple concepts can be experienced simultaneously.

2.4.1 Effectuation model

An expert entrepreneur goes through multiple stages in the entrepreneurial process (Sarasvathy, 2008). The entrepreneur starts with the current means that are available to him or her. The means encompass who the entrepreneur is, what the entrepreneur knows and who the entrepreneur knows. These factors create possible courses of action, which encompass things the entrepreneur can do and are believed to be worth doing. An early step the entrepreneur takes is to interact with other people. A part of these will result in certain commitments from people to the business. Even though this is positive, it also means that these new stakeholders bring new commitments and new means and goals. Each new commitment starts two cycles, one that is expanding and one that is converging.

(23)

The following figure 1: Dynamic model of effectuation adapted from Sarasvathy (2008) gives an overview of the process.

Figure 1: Dynamic model of effectuation adapted from Sarasvathy (2008).

The model listed above is adapted from Sarasvathy’s original effectuation model. The names of the stages have been altered to ensure consistency. Furthermore, in the remainder of this thesis, the stages: means available, possible course of action, interaction, stakeholder commitment and new means, new goals are highlighted. New markets are not further touched upon since the focus of the thesis is the internal process of individual entrepreneurs. The following part describes the entrepreneurial stages in more detail. Means available

In her research on expert entrepreneurs, Sarasvathy (2008) found three categories of means: identity, knowledge base and social networks. Whereas the importance of prior knowledge and social networks had already been found, it is argued that identity is also of importance. An important addition is that an individual’s identity is shaped by knowledge and networks and vice versa. The factors influence each other. Sarasvathy (2008) concludes that prior knowledge, social network and the effecutator’s identity constitute the initial patches of the effectuation process.

(24)

Possible course of action

According to Sarasvathy (2008), effectuators start with only a vague idea of their goals. The goals that the effectuator does set consist almost entirely of things that are currently within the effecutator’s knowledge. Examples are commitments, monetary requirements, reliable future income streams and the current net worth. A core characteristic of the effectuation model lies at the heart of this stage: focussing on aspects in the future that are controllable about the effecutator’s environment (Sarasvathy, 2008).

Interaction

In the interaction stage, effectuators create actionable hypotheses and test them through action in the world and interaction with others (Sarasvathy, 2008). This process of testing hypotheses is very similar to the use of “leap of faith hypotheses” in the Lean Startup (Frederiksen & Brem, 2017). An important part of interaction is that the future vision of an effectuator’s startup only appears after a dynamic series of stakeholder interactions instead of creating a vision and selling this to targeted stakeholders. Interactions with others can go in three ways: interactions that become commitments, interactions that do not become commitments and external, out of control events (Sarasvathy, 2008).

Interactions that become commitments: Interactions that become commitments means new members enter the effecutator’s network. These new committed stakeholders help shape the venture and its transformation into certain new structures.

Interactions that do not become commitments: Whereas a commitment transforms the current product or service to a new version, rejected commitments signal a need to explore alternatives. There are three ways to do this: Transform (ignore the rejection and continue current path), explore (look for alternatives by growing the effectuator’s network), or exploit (argue the transformation of the product or service is complete and start competing with other markets).

External, out of control events: These events can consist of unexpected macroeconomic, political, or technological shocks. Furthermore, an exit of a key individual in the network can occur (Sarasvathy, 2008).

(25)

Stakeholder commitment

Stakeholder commitment is an important stage in the effectuator’s process, where a few core characteristics of effectuation are explained. A stakeholder in an effectuator’s network consists of members that make actual commitments to the business. In addition, each member of the stakeholder network commits only what the individual can afford to lose to ensure damage control if the venture is unsuccessful. Lastly, the goals of the network are only determined by committed network members; pre-existing goals do not determine who comes on board. A few ways exist in forming an effectuation network: through serendipity, through a pre-set plan or through activating existing networks (Sarasvathy, 2008).

New means, new goals

When commitments by stakeholders are made, the service or product will change, depending on these new stakeholders. The stakeholders will ensure that the means available increase, making goals more constrained. After reiterating this process multiple times, the product or service can become solidified (Sarasvathy, 2008). This reiterative process of revisiting entrepreneurial stages is also one of the key areas of the Lean Startup (Frederiksen & Brem, 2017).

The key to this process is that the effectuator’s network does not select from different alternatives but transforms the existing reality into new alternatives. These alternatives create new goals and a new set of means, with which the effectuator’s network starts again in the process of effectuation (Sarasvathy, 2008).

2.4.2 Criticism on effectuation

Kitching & Rouse (2020) argue that the effectuation theory has serious flaws. The authors focus on effectuation theory and not specifically on the effectuation model. However, since the model has its origin in the theory, their criticism is deemed relevant. In effectuation theory, the entrepreneur has a too central ‘heroic” role as the initiator of new businesses. Furthermore, it under-theorises the influence of context. The authors question whether effectuation theory can explain completely how and why entrepreneurs act. The eventual aim of the effectual theory is unclear; it is claimed to be used for design-related principles, decision-making, and the venture creation process (Kitching & Rouse, 2020). In our thesis, we have decided to take the venture creation process perspective on

(26)

effectuation. In more detail, Kitching and Rouse (2020) argue that structural and cultural influences are not included sufficiently in the effectuation theory. It is not ignored in the model, the stage stakeholder commitment includes structural and cultural influences, but this stage is conceptualised too specifically, according to the authors. The authors argue this stage does not adequately include structural and cultural influences.

Sarasvathy (2008) has also recognised the need for more elaboration on the effectuation model and called for authors to combine it with other ideas and approaches, including structure-agency approaches. Furthermore, the author argues more work combining effectuation with social network theory is needed (Sarasvathy, 2008, p. 298). One example of this is a study conducted by Murdock & Varnes (2018), who combined effectuation with the network actor theory. We argue that this research is an example of how the effectuation theory can be used. It can serve as a basis to expand upon other theory or giving more attention to the areas that do not receive sufficient attention. Concluding, criticism on the use of effectuation for venture creation exists. Still, we argue that, even though the criticism is well-founded, the usefulness of effectuation depends on how it is applied. Using effectuation merely as a model on which empirical data can be added to enrich the data should provide a good indicator of the venture creation process. This fact, in combination with the wide use it currently has among entrepreneurs, makes us confident that this model can be used in the context of our research.

Summarising, sustainable nascent entrepreneurs can be supported regarding cognitive characteristics, social capital and human capital (see chapter 2.2). Furthermore, entrepreneurs go through different reiterative stages throughout the entrepreneurial process. There are new ways of supporting nascent entrepreneurs in the venture creation process, namely entrepreneurial ecosystems. These ecosystems support nascent entrepreneurs, possibly for longer periods, allowing them to become successful (Cohen, 2006).

2.5 Entrepreneurial ecosystems

According to Cohen (2006), the aim of an entrepreneurial ecosystem is to foster sustainable development through new firm creation and contains startups and businesses with a common geographical location. According to Lamine et al. (2018), ecosystems depend on the regional context, and hence entrepreneurial activities differ across regions.

(27)

Thus, the number of family businesses, student startups and high-tech firms vary in different regions. Moreover, there are differences in funding, support mechanisms, and mobility, which need to be considered (Lamine et al., 2018). Bischoff and Volkmann (2018) add that the surrounding entrepreneurial environment, such as the network of local and regional stakeholders, highly impacts the new venture's success. With its support, it provides a protective ecosystem. Sustainable entrepreneurship can be fostered by sustainable business support and collaborative networking. Volkmann et al. (2019) revealed four factors that promote sustainable entrepreneurial ecosystems: sustainable orientation, recognition of opportunities for sustainability and mobilising resources, innovative collaborations for being sustainable, and finding or creating markets for sustainable products. Nevertheless, according to Volkmann et al. (2019), there is a lack of research on how entrepreneurial ecosystems become sustainable.

Volkmann et al. (2019) further mentioned different entrepreneurial ecosystems such as business incubators and accelerators. They provide their tenants with different value propositions and provide synergies for their tenants. Accelerators are limited duration programs, lasting up to three months on average (Cohen, 2013). On the contrary, business incubators support ventures from an earlier stage and longer, meaning they cover multiple entrepreneurial stages (Bruneel et al., 2012; Hackett & Dilts, 2004). For these reasons, we have decided to focus our research on business incubators.

2.6 Business incubators

According to Klofsten et al. (2016), there are different types of incubators, such as technology incubators, science parks and business incubators. Technology incubators and science parks are primarily focused on technology startups, whereas business incubators generally do not focus on a particular startup type. As mentioned earlier, we only focus on business incubators. Hackett and Dilts (2004) describe a business incubator as a shared office space that gives its tenants access to value-adding services such as strategic business assistance. Moreover, the authors emphasise the value of the business incubator's network consisting of individuals and organisation within and outside the business incubator (Hackett & Dilts, 2004). Chakrabarty (2020) points out that business incubators can facilitate collective entrepreneurial action with a group of like-minded entrepreneurs. Schwartz and Hornych (2010) argue that tenants mostly have an informal relationship with each other, and business incubators have limited power to boost formal business

(28)

relationships between the tenants. The business incubator's objective is to support new venture development (Hackett & Dilts, 2004).

The emergence of business incubators started as technology incubators during World War II at aerospace companies in Los Angeles (Lamine et al., 2018). Hence, innovative projects moved from the research lab to a lateral company unit to ensure product development regardless of a matching company objective. Otherwise, they would have been stopped in the research and development department. Later, other industries and even universities got aware of this concept and made use of it. Universities used the concept, and it evolved to a business incubator to offer support to professors starting high-tech companies (Lamine et al., 2018). This connection between universities and business incubators still exists (Hackett & Dilts, 2004).

Three different business incubator generations used to provide, in its essence, similar support services such as infrastructure, business support and networking to their tenants (Bruneel et al., 2012). Further, Bruneel et al. (2012) argue that these services were less used by tenants of the first and second business incubator generation because they did not need them. The reason for this was the different purpose of the first two business incubator generations since they also allowed more established companies to enter. Hence other selection criteria applied for the tenants.

Nowadays, this has changed in the third business incubator generation since the business incubators focus primarily on supporting new venture creation and therefore host less experienced entrepreneurs who are in greater need of support services than already established companies. Thus, the current tenants are younger and have a shorter incubation period than the first and second business incubator generation. Therefore, third-generation business incubators host more companies and try to graduate them quicker. Since these companies do not generate much turnover in the early stage, the third generation's business incubators are more dependent on public funds (Bruneel et al., 2012). Finally, Hackett and Dilts (2004) stated that nowadays, the business incubators are mostly publicly funded. Sustainable entrepreneurs can join a business incubator to receive the support they desire, but recently, it is also possible to attend sustainability-oriented incubators (Bank & Kanda, 2016). These sustainability-oriented incubators can focus solely on supporting sustainable entrepreneurs (Fonseca & Chiappetta Jabbour, 2012).

(29)

2.6.1 Sustainability-oriented incubators

Different definitions of sustainability-oriented incubators exist. Since our research focuses on sustainable entrepreneurship in an environmental context, we have decided to use Fonseca and Ciappetta Jabbour’s (2012) definition of sustainability-oriented incubators, being business incubators that are committed to offering green business support to tenants or support in eco-entrepreneurship in general. Sustainability-oriented incubators can deliver, with their specialised knowledge in their field, specialised services to their tenants. This sector-specific knowledge allows the incubator management to obtain specific knowledge to satisfy the tenants' needs (von Zedtwitz & Grimaldi, 2006). Bank et al. (2017) have a contradicting view and found that one reason “Green Garage”, a sustainability-oriented business incubator in Berlin, is so successful is its broad approach regarding its operations. They have an overarching mission that is the same, but the incubator is not sector-specific. Schwartz and Hornych (2010) are also critical of specialised incubators and argue that specialised incubators do not increase internal networking compared to diversified incubators. Furthermore, it can lead to a negative working climate. When the market segments are too similar, tenants can be afraid to share their knowledge and ideas with the community.

Both public and private actors can start sustainability-oriented incubators. For example, Potts (2010) argued that public actors should create sustainability-oriented incubators, therefore integrating environmental, economic, and entrepreneurial factors. Furthermore, Fonsesca and Chiappetta Jabbour (2012) argued that already existing incubators could be greened to become sustainability-oriented incubators.

However, sustainability-oriented incubators are not always able to have a complete focus on sustainability. Based on an EU-funded project, Klofsten et al. (2016) found that many incubators were forced to revise their goals due to insufficient green startups that signed up for the incubators and hence open up their incubator for regular startups. On the contrary, incubators that received plenty of applications can solely focus on startups with a sustainability-oriented approach. Bank and Kanda (2016) found similar results and argue that sustainability-oriented incubator managers should mix sustainability profiled tenants with conventional tenants to broaden the selection base. This can result in fewer problems with finding enough suitable tenants for the incubators.

(30)

Bank and Kanda (2016) researched the influence of sustainability-oriented incubators’ support systems on their tenants. The authors concluded that sustainability-oriented incubators' support for their green tenants was similar to any conventional incubator. The main difference was the type of network that these sustainability-oriented incubators had. They are centred around sustainability, and therefore, they have a network in this field. Furthermore, the authors argue that more research is needed by in-depth case studies, researching this influence.

Business incubators (see chapter 2.5) and sustainability-oriented incubators can support entrepreneurs in different ways. In recent research, the effect of incubators on their tenants has been researched (Bank et al., 2017). Different incubator support systems have been identified that business incubators offer their tenants to support the entrepreneurial journey (Bergek & Norrman, 2008).

2.6.2 Incubator support systems

A business incubator influences its tenants through different support systems. Throughout literature, we have recognised five main support systems that we deemed most important, which are the following: pre-incubation (Bank et al., 2017; Bergek & Norrman, 2008), infrastructure (Peters et al., 2004; Schwartz & Hornych, 2010), business support (Bergek & Norrman, 2008; Bruneel et al., 2012), mediation (Bergek & Norrman, 2008; Peters et al., 2004) and graduation (Bergek & Norrman, 2008).

Pre-incubation

Pre-incubation refers to the selection of tenants; who should be allowed entry and who should be rejected (Bergek & Norrman, 2008). Hackett and Dilts (2004) mention different options for the selection processes: employment and technical experience of the entrepreneur(s), the market the entrepreneur is aiming at, or the product or service and profit potential that the venture has. In principle, business incubators have two different approaches to selecting tenants: based on the entrepreneur and based on the team (Bergek & Norrman, 2008). Bank et al. (2017) add that it is vital for a business incubator to have a well thought through pre-incubation process to ensure the quality and the right volume of future tenants.

(31)

Infrastructure

Infrastructure within business incubators entails office facilities, localities and other services of an administrative kind (Bergek & Norrman, 2008). Peters et al. (2004) refer to the office facilities as co-location of different entrepreneurs. The authors add that infrastructure includes rental space, shared administrative services and equipment. Bergek & Norrman (2008) argue that drawing from earlier research, infrastructure services are more or less the same among different business incubators.

Business support

Peters et al. (2004) refer to business support as management assistance. Bergek and Norrman (2008) expand on this topic, arguing that business support contains entrepreneurial training, business development advice and more general services. These general services can include financial- and legal assistance, accounting and advertising. Finally, the authors describe the level of intervention a business incubator can provide, ranging from strong intervention to lassez-faire incubators. Strong intervention incubators are heavily involved and sporadically even provide management teams, whereas lassez-faire incubators give their tenants little assistance.

According to Hackett and Dilts (2004), business assistance can be executed differently, by different business incubators, regarding time-intensity (how much time is devoted to it), capacity (to which extend strategic, administrative and operational assistance is included), and quality (the value of the assistance).

Rice (2002) refers to business support by business incubators as co-production, which involves the joint efforts between two different parties, determining what the collaboration’s output will be. The author differentiates multiple types of business support, of which we distinguished the most frequent ones below in table 1: Most commonly used support systems (Rice, (2002).

(32)

Table 1: Most commonly used support systems (Rice, 2002).

According to Rice (2002), business support can also be seen as counselling. Furthermore, the author argues that counselling refers to the circulation of advice and knowledge to entrepreneurs and argues it is a critical area of programs that offer assistance. Incubator assistance is significantly different from other types of assistance because the incubator manager is on-site with the tenants, making the counselling ongoing and diverse (Rice, 2002).

Rice (2002) continues by arguing about the different types of counselling. The first is reactive and episodic counselling, meaning the counselling focuses on a particular problem and generally limited in terms of time. Secondly, proactive and episodic counselling is initiated from the incubator, and it is more of an ad-hoc, informal nature. Lastly, continual and proactive counselling (incubator initiated) encompasses a more intense intervention by incubator managers, continuously reviewing the entrepreneur’s work.

Mediation

Mediation refers to the efforts of business incubators to connect incubator tenants with each other and with the outside world (Bergek & Norrman, 2008). Furthermore, there is an inherent part of mediation that can be important for social capital building among

Sustainability-oriented incubators: nurturing our future heroes? : A single case study research.