Measuring the value of a business incubator through the alumni entrepreneurs

Transkript

1 Measuring the value f a business incubatr thrugh the alumni entrepreneurs Explratin f existing knwledge, and develpment and testing f a measurement system Ida Herbertssn 1

2 Cpyright Ida Herbertssn Institutinen för byggvetenskaper, Byggprduktin, Lunds tekniska högskla, Lund ISRN LUTVDG/VBEL-14/9007-SE Lunds tekniska högskla Institutinen för byggvetenskaper Byggprduktin Bx 118 SE LUND Printed in Sweden by Media-Tryck, Lund University Lund

3 Preface Thrugh this study, I will finalize my studies at Lund Institute f Technlgy and receive my bachelr s degree in Civil Engineering. It has been a very interesting study and I have learned a lt that I take with me t the future. It has taught me things abut hw t d and nt t d when cnducting a study, whether academic r nt. I have learned mre abut hw I wrk well and, nt s well. The study has bradened and deepened my interest and, knwledge f entrepreneurship and it has strengthened my ability t wrk in an area where prir research, knwledge, and data is very limited. I want t dedicate this wrk t my grandparents, especially t my grandfather, my mther s father, Mårten, wh after a lng life passed away last year. I dare t say that his highest wish was fr his grandchildren t be well educated and since this study will be the last step twards my first University degree, I knw he is prud f me where ever he is. Als, my father s father, Rune, wh passed away much t early, I knw he is smiling frm abve. I miss bth f yu a lt and I wish yu were still here. I have many happy memries frm my time spent with yu, thank yu fr that. Bth f my grandmthers, Ingebrg and Iris are still here, which I am very happy abut, and I hpe yu will be arund fr a lng time. Thank yu, all fur f yu, fr always being there fr me and my sister, fr taking part in building the amazing huse we grew up in, fr making dinner when ur parents had t wrk, fr playing with us and fr always supprting us. Thank yu fr being part f my great childhd and fr always believing in me! February 2015 Ida Herbertssn 3

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5 Sammanfattning Titel: Författare: Handledare: Prblemfrmulering: Syfte: Metd: Slutsats: Nyckelrd: Att mäta värdet av en företagsinkubatr utifrån indviderna sm gjrt sin exit Ida Herbertssn Kristian Widén, Avdelningen för Byggprduktin, Lunds Universitet Mårten Öbrink, Minc En företagsinkubatrs värde ch dess investerares avkastning mats vanligtvis genm finansiella siffrr utifrån de blag sm gör sin exit från inkubatrs. Men en incubatr cacher inte företag, de cacher människr. Därmed vre det mer intressant att mäta värdet utifr ån persnerna, alumni entreprenörerna, sm genmgått inkubatrprgrammet. Utfrska hur en inkubatrs värde kan mätas utifrån persnerna sm genmgått inkubatrprgrammet En induktiv frskningsansats. Literaturgenmgång följt av kvalitativ datainsamling genm intervjuer ch enkäter. Utveckling av ett mätsystem sm delvis testas genm en fallstudie Ett bra mätsystem ska vara kpplat till målet ch mätas i både finansiella ch icke-finansiella termer. Att utgå från alumni entreprenörer för att mäta värde är relevant både enlig literaturen så väl sm emipriska resultat. Men vad ch hur det skall mätas är inte enkelt, ch både påverkan på ttala värdet ch tid ch tillgängliga resurser måste övervägas nggrannt. Entreprenörskap, Affärsinkubatr, Mätsystem 5

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7 Abstract Title: Authr: Supervisr: Prblem Frmulatin: Purpse: Methdlgy: Cnclusin: Keywrds: Measuring the value f a business incubatr frm the individuals wh made their exit Ida Herbertssn Kristian Widén, Divisin f Cnstructin Management, Lund University Mårten Öbrink, Minc The return n invest and value f a business incubatr is usually calculated thrugh financial figures frm the incubatrs alumni cmpanies. Hwever, an incubatr des nt cach cmpanies; it caches peple. Thereby it wuld be mre interesting t measure value f the persns, the alumni entrepreneurs, wh went thrugh the incubatin prgram. Explre hw an incubatrs value can be measured thrugh the individuals wh have gne thrugh the incubatin prgram Inductive research apprach. Literature review fllwed by qualitative data cllectin thrugh interviews and surveys. Develpment f a measurement system which was partly tested thrugh a case study A gd measurement system shuld measure bth financials and nn-financials and be clsely cnnected t the gal f the rganizatin. Using the alumni entrepreneurs as starting pint fr measurements is relevant bth accrding t large amunt f literature and empirical evidence. But, what t measure and hw t d it is nt easy, and impact n ttal value as well as time and resurces available needs t be cnsidered. Entrepreneurship, Business Incubatr, Measurement system 7

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9 Table f Cntents Preface 3 Sammanfattning 5 Abstract 7 Table f Cntents 9 Intrductin 13 Backgrund 13 Shrt Dictinary 15 Prblem Frmulatin 15 Purpse 16 Limitatins 16 Methdlgy 17 Literature review 17 Empirical research 18 Sample f incubatrs 18 Sample f alumni entrepreneurs 18 Other 19 Thery 21 Entrepreneurship what it is 21 Entrepreneurial characteristics, skills and traits 22 Measuring entrepreneurship 24 Measurements business incubatrs 24 Empirical results 27 Gals f an incubatr 27 Measurements incubatrs 27 What des the alumni entrepreneurs frm Minc d tday? 28 What des the alumni entrepreneurs value frm their time at Minc? 29 Handling f persnal data 30 Incubatr Agreement Minc 30 Swedish Persnal Data Act - Persnuppgiftslagen (PUL) 30 9

10 Develpment f measurement system 31 What t include and why 31 System and prcess 33 Case study at Minc 35 Prcess 35 Results 36 Discussin and cnclusins 38 Entrepreneurship and ecnmic grwth 39 The measurement system 40 Case Study 41 The prcess 41 The results 42 Other 42 Future Studies 43 References 45 Appendix 49 Empirical results & evidence 49 Survey/Interview - alumni entrepreneurs 49 Answers alumni entrepreneurs last questin 49 Suvery/Interview 2 incubatrs 52 Answers incubatrs 52 cnversatin Datainspektin regarding PUL 55 Develped measurement system 57 Survey entrepreneurial traits, cmpetencies etc. 57 Measurements/inf t gather regarding cmpanies 58 Measurements Netwrking 58 Survey/Interview f Imprtance f incubatr 58 10

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13 Intrductin This sectin gives an verview f the prblem and its backgrund as well as describe the purpse f this study and the study s limitatins., Backgrund Creatin f new business pprtunities thrugh entrepreneurship, prductivity and innvatin leads t ecnmic grwth (Ekmekçiğlu, 2012) One f the main building blcks fr ecnmic grwth and develpment f a cuntry is the active businesses. Cmpanies cntribute t sciety in many ways, fr example they ffer peple jbs and they pay taxes t the gvernment. Accrding t Prter (1998), the envirnment in which a cmpany is wrking is very imprtant fr its develpment. Thereby, business incubatrs, which wrk t create a great envirnment fr new cmpanies and wrk t fster and develp the new cmpanies, are imprtant fr sciety (Löfsten & Lindelöf, 2005). Research shws that it is the yung cmpanies that create mst f the new jbs (Natinal Bureau f Ecnmic Research). Yung and new cmpanies are gd at disruptive innvatin while existing and ld nes usually are nt. Disruptive innvatin changes the market by creating new markets cmpared t sustaining innvatins that develps existing prducts and services. One example f disruptive innvatin is the first cellular phne cmpared t a sustaining innvatin, which wuld be develpment f the landline phnes. The cellular phne created a ttally new market that did nt exist befre (Christensen, 2014). In an existing cmpany after the sustaining innvatins, what usually cmes is efficiency innvatins, fr example making changes making the manufacturing require less peple. Existing cmpanies usually d nt invest in market creating innvatins, disruptive innvatins, because it takes 5-10 years t get the investment back cmpared t efficiency innvatins, which are paid back within 1-2 years. Market creating investments create jbs but need capital while efficiency innvatins frees capital but reduces jbs. Existing cmpanies have key perfrmance indicatrs, which benefit investments that are paid back as sn as pssible. This is why they d nt chse t invest in disruptive innvatins; the payback time is t lng (Christensen, 2014). This 13

14 means that t create new jbs, the new cmpanies, which d nt nly lk at the payback time, but instead create new markets, are very imprtant. Figure 1 Definitin f incubatr "Incubatr." Merriam-Webster.cm. Merriam-Webster, n.d. Web. 29 Aug As can be read n the picture abve a business incubatr wrks t help new business ventures by, fr example, ffering cheap ffice space, business advisrs and prviding access t a brad netwrk. (Merriam-Webster, 2014) Different incubatrs wrk in different ways, they ffer different things, sme are specialized in fr example life science ventures r IT, but what they all have in cmmn is t help develp the new ventures (Wallentén, 2014). The histry f business incubatrs dates back t the 1950s when the first incubatrs started t supprt the entrepreneurial academics at the Universities. The first incubatrs were started in the US, in 1951 The Stanfrd Research Park in Califrnia and in 1959 The US Business Incubatr in Batavia, New Yrk. During the 1970 s the cncept spread t Sweden and tday incubatrs are fund at many Universities all ver the wrld as well as at places withut a cnnectin t a University (SISP, 2014). Mst r almst all incubatrs are dependent n financing frm a third party. In Sweden ALMI Företagspartner (Almi), wned by the Swedish Gvernment, gives the pssibility fr incubatrs t apply t be part in their incubatr prgram called Business Incubatin fr Grwth (BIG). BIG can give the incubatrs caching as well as financing. In return 14

15 BIG demand that the incubatrs prvide tp quality business caching fr grwth cmpanies (Wallentén, 2014). There are als ther types and frms f financing that incubatrs can receive, fr example frm the municipality as well as frm private persns r cmpanies. Because f the fact that the incubatrs are dependent n financing frm thers they als need t shw their financiers that the mney they receive are used in a way that creates value. Tday, the value that an incubatr is creating is usually measured thrugh the incubated cmpanies perfrmance after they have made their exit. Examples f measurements are the number f jbs created, amunt f tax mney paid, and venture capital attracted. These numbers are all interesting t measure, but, an incubatr des nt cach cmpanies, it is the individuals that g thrugh the incubatin prgram that are cached. Sme f the cmpanies will nt cntinue after exit, sme f the peple might nt cntinue within the cmpany they ran at the incubatr. Hwever, even if the peple chse t d ther things they will still have gained knwledge and experience in thrugh the incubatr that will be valuable. This is why it wuld be mre interesting t lk at what the individuals d, nt nly at the perfrmance f the alumni cmpanies. (Öbrink, 2014) Shrt Dictinary Alumni entrepreneur: A persn wh has taken part in an incubatin prgram at a business incubatr Alumni Cmpany: A cmpany that is/was run by an alumni entrepreneur during the time f the incubatin prgram Prblem Frmulatin This thesis aims t explre hw the value f a business incubatr can be measured thrugh the individuals that have made their exit frm the incubatr (thrugh the alumni entrepreneurs). Secndly, it will als start develping a measurement system t measure this value using the alumni entrepreneurs as the starting pint. It is t prefer if parts f the measures are financial number r can be transferred int financial numbers. This is because they are easy t understand and t cmpare in many different ways and will thereby be mre valuable fr the incubatrs as well as fr their financiers and ther parties. Thirdly, data gathering and analysis f alumni entrepreneurs frm Minc, an incubatr in Malmö, will cnducted as a case study. Since this thesis will be dealing with persns and persnal data a shrt sectin will be handling the persnal data act and what pssible restrictins that might apply. 15

16 Purpse The purpse is t explre hw a business incubatrs value can be measured thrugh the individuals after they made an exit frm the incubatr. Limitatins There are f curse sme limitatins within the area due in large part t the time limits f this wrk and the lack f prir and existing research in the specific area. The fcus will be n Swedish incubatrs when it cmes t mre specific infrmatin, such as the gals and visins f incubatrs, making it brader is nt pssible due t time. I have chsen Sweden since this is where I persnally have the mst knwledge, and since the thesis is cnducted in cllabratin with Minc in Malmö. Hwever, this des nt say that it will nt be relevant t incubatrs utside f Sweden as well. It is als imprtant fr this research and the develpment f a measurement system t make sure that what is measured is lead back t the gals f an incubatr. The gals fr different incubatrs will differ and thereby the measurements might have t be adjusted. This thesis will aim t develp a measurement system t fit the verall gals f different incubatrs, s part f the wrk will be t find and understand the verall gals that can be applied t at least mst f the incubatrs in Sweden. Sme incubatrs have specific fcus areas such as life science r IT. This thesis will fcus n the similarities f different types f incubatrs nt the differences. Due t time cnstraints, nly ne incubatr will be studies in a case study and nly parts f the measurement system will be pssible t test within this timeframe. 16

17 Methdlgy Since this study was in a narrw area where I had little experience when starting it was first f all imprtant t chse a research apprach that was flexible. The study was cnducted in a space where I was able t get access t a lt f qualitative data, thrugh interviews and surveys but where the existing thery was limited. Due t time cnstraints, I als knew that it wuld nt be pssible t test the measurement system enugh t be able t generalize the results. This is why an inductive research apprach was selected. Using a deductive apprach wuld have required mre structure, mre thery and quantitative data while an inductive apprach is mre flexible and the results des nt necessarily have t be generalized. The research has been cnducted frm the utside, althugh when I am finishing this reprt I am currently wrking with a venture at an incubatr, but nt at the Minc, thereby a similar setting t what I have been studying. The research started with a literature review t understand what knwledge already exists. Then empirical data was cllected thrugh interviews and surveys with incubatrs within Sweden. Fllwing that was mre data gathering, nw frm entrepreneurs wh had taken part in the incubatin prgram at Minc. Frm the thery and the data, a measurement system was then develped and parts f it was tested and analyzed in a case study at Minc. Literature review This study started with a literature review. As expected, there was very little research and infrmatin t be fund within the narrw area f measuring the value f a business incubatr thrugh the alumni entrepreneurs, but literature n entrepreneurship in general was easily fund. Large part f the literature review have been in the area f entrepreneurial skills and cmpetencies as well as hw entrepreneurship affects ecnmic grwth. It was hard t find scientific research abut business incubatrs, since incubatrs is still a fairly new cncept, but sme research has been dne. Furthermre research have been cnducted abut what parameters t use when evaluating an incubatr but it is fairly brad, evaluating the incubatr as a whle but never the actual caching f the entrepreneurs. Unfrtunately, nthing has been fund s far abut evaluating the incubatr based n the alumni entrepreneurs. This means that verall the area chsen fr this thesis is still tday quiet unknwn, indicating that it is a difficult and hard area t 17

18 cnduct research abut but als very interesting. Except fr literature abut entrepreneurship, entrepreneurs and business incubatrs, literature abut measurement systems in general have als been studied. Empirical research The empirical research cnsisted f interviews and surveys (mst f them cnducted thrugh ). Persns in charge f incubatrs, usually the CEO s was invited t take part in a survey t get a brad understanding f their view f measuring their wrk in general and thrugh the alumni entrepreneurs specifically. Then the alumni entrepreneurs wh made an exit frm the incubatr at Minc were asked abut their time and experiences at Minc t understand what has been valuable fr them after making their exit. I have als been in cntact with Margareta Wallentén at Almi t get an verall view n their wrk and n incubatrs in Sweden. Furthermre, I have als at times been having infrmal discussins with Mårten Öbrink at Minc especially fr the case study cnducted at Minc. Sample f incubatrs The incubatrs fr the survey were chsen t represent different specializatins as well as cver Sweden gegraphically. The cntacted incubatrs were all, at the mment f cntact, part f and partly financed by Almi s initiative Business Incubatin fr Grwth (BIG), thereby shwing a certain quality f the incubatrs. BIG fcuses n incubatrs wrking with grwth cmpanies with an internatinal ptential and the incubatrs shwing the best results are granted financing. In ttal 25 incubatrs was cntacted by . Sample f alumni entrepreneurs The case study was cnducted at Minc since this prject was carried ut in cllabratin with them. There was nt time t d it at mre incubatrs, even thugh that wuld have increased the reliability and pssibility f generalizing the results significantly. This includes bth the actual test f the measurement system as well as the survey abut what the alumni entrepreneurs are valuing frm their time at the incubatr. In ttal, a bit ver 100 persns have made their exit frm Minc frm the start and until the end f I was prvided with sme infrmatin abut the exit cmpanies and entrepreneurs at Minc frm the persnnel at Minc. These peple were bth cntacted thrugh as well as researched thrugh Ggle and LinkedIn. 18

19 Other One part f the wrk als cnsisted f understanding the persnal data act and which, if any, limitatins it culd bring upn the develpment f the wrk and infrmatin thrugh the webpage f Datainspektin as well as an cnversatin. Infrmatin abut persnal names and cmpany names fr the case study at Minc as well as which incubatrs that answers will nt be disclsed, nly results and utcmes f data and analyses will be shwn. 19

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21 Thery This chapter gives an verview f sme f the existing knwledge and research relevant fr this thesis. Areas that are discussed are entrepreneurship, entrepreneurs, business incubatrs, measurements f incubatrs as well as measurement systems in general. Entrepreneurship what it is There are several definitins f entrepreneurship and several descriptins f an entrepreneur. (Henreksn & Stenkula 2007). The exact definitins f entrepreneurship differs between different authrs and peple but there is a need fr a cnsensus cncerning these definitins (Rwley & Mitchelmre, 2008). It can be stated that entrepreneurship has t d with peple and that entrepreneurship is generated thrugh entrepreneurs. A reasnable definitin is that an entrepreneur is a persn wh gets aware f, and creates, new ecnmic pprtunities. Entrepreneurs intrduce their ideas t the market, they make decisins, they wrk in cnditins f high uncertainty, and they always have the ambitin t create value, althugh that value might nly be fr the entrepreneur him/herself and nt always fr ther r sciety. Entrepreneurial peple are nt necessarily self-emplyed r starting new businesses and self-emplyed peple and peple starting new businesses are nt necessarily entrepreneurial. Using the entrepreneurial talent in the right way culd be as imprtant as the talent itself. Large part f the entrepreneurial knwledge is gained thrugh learningby-ding. The entrepreneur plays an imprtant rle when it cmes t cmmercializatin and explitatin f existing knwledge as well as spreading new knwledge. Hwever, it is als imprtant t remember that an entrepreneur cannt d it alne; entrepreneurs need a netwrk f ther cmpetencies t create smething successful. (Henreksn & Stenkula 2007). The multi-cuntry survey Glbal Entrepreneurship Mnitr investigated the difference in ecnmic grwth between entrepreneurship by necessity; when peple has n ther chice than becming entrepreneurs and entrepreneurship by pprtunity; when peple chse t start a business based n the perceptin that a business pprtunity exists. It was fund that necessity entrepreneurship has n effect n ecnmic grwth while 21

22 pprtunity-based entrepreneurship d. Due t high living standards in Sweden mst f the entrepreneurship here is pprtunity-based. (Acs, 2006) Entrepreneurial characteristics, skills and traits The imprtance f entrepreneurship and entrepreneurial cmpetencies will increase in the future, in large part because the imprtance f ther cmpetitive aspects such as natural resurces, capital and natinal brders will decrease in cmparisn. Thereby the individuals are imprtant since they, as entrepreneurs, are the nes creating and seizing the pprtunities. (Svenskt Näringsliv, u.d.). There are several bks written by and abut successful entrepreneurs stating that the peple is ne f the keys t create successful businesses, fr example, Gd t Great by Jim Cllins (2001) and Business Stripped Bare by Richard Bransn (2008). Accrding t Saras Saravathy (2001), everyne can becme an entrepreneur. She has interviewed several expert entrepreneurs and fund that what makes them successful is what she calls effectual reasning. In schl and life, we are taught t set a specific gal and use that as the starting pint and find the means necessary t reach that gal in the mst ptimal way. But, if yu instead use effectual thinking, yu start with the means yu have and let the gal emerge frm the means (Sarasvathy, 2001). The cncept f effectual reasning cnsists f five principles; Bird-in-Hand, Affrdable Lss, Patchwrk Quilt, Lemnade and Pilt-in-the-plane. Bird-in-Hand is abut understanding wh yu are, what yu knw and, wh yu knw, and frm that imagine the pssibilities. Affrdable lss is abut understanding what yu can affrd t lse and seek risks and pprtunities where there will be an upside even if the dwnside happens. Furthermre, entrepreneurs leverage the surprises and eventual dwnsides, just like making Lemnade ut f lemns. An entrepreneur des nt d it alne, but builds up partnerships with cmmitted stakehlder and c-create, which can be thught f like a Patchwrk Quilt. Lastly, Pilt-in-the-plane is abut fcusing n what yu can cntrl and the believing that the future can be made (Sarasvathy, 2003). 22

23 Figure 2 Effectuatin and its principles. Figure frm Lackéus (2013) writes abut develping entrepreneurial cmpetencies and he defines it as knwledge, skills and attitudes that affect the willingness and ability t perfrm the entrepreneurial jb f new value creatin; that can be measured directly r indirectly; and that can be imprved thrugh training and develpment (Lackéus, 2013). S. Mitchelmre and J. Rwley (2008) writes in their literature review that many f the authrs they read agreed n sme cmpetencies being imprtant as an entrepreneur while thers differed. The agreed cmpetencies were; management skills, including the ability t develp management systems and rganizatin and crdinatin skills; idea generatin; cnceptual and analytical cmpetencies, including the ability t c-rdinate activities; custmer management skills; delegatin and mtivatin skills; the ability t recgnize and take advantage f pprtunities, the ability t frmulate strategies taking advantage f pprtunities; hiring skills; decisin making skills; leadership skills; and cmmitment. (Mitchelmre & Rwley, 2008) Baum and Lcke (2004) fcused their research n finding traits r characteristics needed t vercme the challenge that entrepreneurs face. They described the challenge as a situatin f extreme uncertainty, resurce shrtages, surprises, and rapid change. They lked at entrepreneur-ceo s and hw their passin, tenacity, and new resurce skills affected venture grwth. The study was cnducted ver a 6-year perid f time and ne cnclusin was that the entrepreneur s skills, traits and mtivatin factrs that was 23

24 included in the study is significantly related t venture grwth. The mtivatin factrs: visin, gals, and self-efficacy influence business perfrmance. The discussin in their paper states that the cmpany s grwth is nly ne f the things that can be studied as a relevant utcme ther they suggest are prfitability, survival, career satisfactin, and innvatin. It was fund that...entrepreneurs passin, tenacity, and new resurce skill affected venture grwth thrugh cmmunicated visin, gals, and self-efficacy (p.597) (Baum & Lcke, 2004) Measuring entrepreneurship Measuring entrepreneurial cmpetencies is very imprtant and there are several different appraches int ding it but there is a big challenge in understanding the cmpetencies. The different framewrks that have been develped have bth similarities as well as differences frm each ther, which is ne strng indicatr f the challenge. (Mitchelmre & Rwley, 2008). There are als indicatins f the entrepreneurs cmpetencies being cntextual and situatinal (Haytn and McEvy, 2006) Van der Heijden is recgnized t have dne the mst cmprehensive and rigrus develpment f a scale fr measuring cmpetencies where she fcuses n general expertise rather than business and entrepreneurial expertise (S. Mitchelmre and J. Rwley, 2008). The methd she develped measured five different dimensins and each dimensin was evaluated thrugh scales f several items. The dimensins was knwledge, meta-cgnitive knwledge, skill, scial recgnitin and, grwth and flexibility. (Van der Heijden, 2000). Using qualitative methds can prvide new and ther infrmatin cmpared t the usually used quantitative methds. (Hindle & Yencken, 2004) Measurements business incubatrs Vanderstraeten et al. (2012) argues that a balanced screcard and strategy map tl are gd measurement systems fr incubatrs since they are accessible and cmprehensible and gives bth peratinal and financial measurements. The fcus in their study has been n the nt-fr-prfit ecnmic develpment incubatr, which aims t stimulate reginal develpment thrugh business creatin and develpment and statistics shw that the majrity f incubatrs in the wrld have this fcus. Perfrmance measurements f incubatrs is thugh still a relatively new research area, which is pinted ut by several surces. (Vanderstraeten et al. 2012) The utput frm a perfrmance measurement system shuld supprt strategic bjectives, have an apprpriate balance, e.g. shrt-and lng-term, varius perspectives, guard against 24

25 sub-ptimizatin, have a limited number f perfrmance measures, be easily accessible (t btain, t present and t understand) and the purpse shuld be clearly defined (Tangen, 2004). Thrugh Business Incubatin fr Grwth Sweden (BIG) Almi measures the perfrmance f the business incubatrs in Sweden that are receiving financing frm Almi. Examples f what is being measured is number f ideas that ges thrugh the incubatrs and where the ideas cme frm, hw the ideas d during the incubatin time (terminated r nt), financing attracted, which industries they perate in, revenues, and, jbs created. The measurements are dne fr alumni cmpanies as well as existing incubatr cmpanies (Almi, 2014) 25

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27 Empirical results This sectin gives an verview f the empirical results gathered frm the incubatrs and entrepreneurs. A business incubatr aims t fster and help develp new ventures by ffering fr example business caching, netwrk and ffice space. After a certain time the venture/cmpany makes an exit frm the incubatr, if nt terminated earlier. During the remainder f this thesis a persn running a venture/cmpany at an incubatr is a called an entrepreneur and when making an exit the incubatr, either with r withut their venture/cmpany the entrepreneurs becmes alumni entrepreneurs and the cmpany run at the incubatr becmes an alumni cmpany. Gals f an incubatr The general gals f incubatrs are t, thrugh their incubated ventures and cmpanies, create new jbs in its regin, and generate tax incmes. Sme incubatrs have very specific gals such as within the industry that they fcus fr example ICT r Life Science, which will then f curse als be stated in their gals and visins. (Wallentén, 2014) Measurements incubatrs At different incubatrs bth hw and what yu fllw-up related t the alumni entrepreneurs and alumni cmpanies differ. The differences depend n things such as time and resurces as well as their needs. All the surveyed and interviewed incubatrs take part in BIG they are als part in Almi Assessment. Thrugh Almi Assessment they measure fr example the number f ideas and cmpanies passing thrugh the incubatr, hw many take part in the incubatin prgram, hw many make an exit, turnver percentage that is exprted f cmpanies, peple emplyed by the cmpanies, and capital attracted by the cmpanies. Sme incubatrs are als measured n the return n investment f the gvernment mney, althugh hw this measured is nt stated. Sme incubatrs als fllw-up number f wmen and men as well as peple brn utside Sweden that take 27

28 part in the prgram. Mst f the incubatrs als d a fllw-up with the alumni entrepreneurs abut hw satisfied they are with their time at the incubatr. The incubatrs seems t think the measurements used are all valid and interesting measurements but there are mre things that they think wuld be interesting t fllw-up bth abut the alumni cmpanies and the alumni entrepreneurs as well. Starting with the alumni cmpanies, they wuld als like t knw what the cmpany structure lks like, mergers and acquisitins, sales f parts f the cmpanies and the value f the cmpany. When an alumni cmpany is bught r merged the infrmatin abut it is lst fr the incubatr and it wuld be interesting t be able t still make measurements. Sme als request t be able t fllw-up capital attracted by the cmpanies. It wuld als be interesting t understand hw much the incubatr has meant fr the cmpanies. Lking at what the incubatrs wuld like t knw abut the alumni entrepreneurs, there are similarities t what they want t knw abut the alumni cmpanies. The incubatrs wuld like t knw what the entrepreneurs are ding tday, what they are wrking with, and where they are wrking, if they have a leading psitin, if they have invested in ther cmpanies and if they are active in any bards. Furthermre, the incubatrs think it wuld be interesting t knw if and hw the time at the incubatr has been imprtant and if and hw the entrepreneurs cntribute and share their experiences with thers. Sme incubatrs believe they have enugh infrmatin and that further infrmatin abut the persns wuld nt cntribute enugh cmpared t the time and resurces needed t d it. What des the alumni entrepreneurs frm Minc d tday? T understand what value Minc is creating thrugh the entrepreneurs after they make their exit, it is essential t first understand what they d and then see hw their experiences frm Minc culd be measured thrugh that. Thrugh searches n LinkedIn and Ggle as well as surveys and interviews with alumni entrepreneurs, frm 2005 t 2013, it was fund that many f them have funded mre cmpanies, are invlved in ther start-ups and rganizatin after their time at Minc. Just a few peple are emplyed at bigger cmpanies. Other interesting findings was that peple frm different years f exit have, after their time at Minc, funded cmpanies tgether. 28

29 Ttal number f persns 114 if participating mre the nce, still nly cunted nce Runs their wn business 93 invlved in any funded/c-funded business Runs business frm Minc 76 invlved in business funded/c-funded at Minc Runs new businesses 24 runs business nt started at Minc Emplyed 22 full-time r part-time emplyed at ther cmpany than their wn Unknwn 7 nt enugh inf fund Nte: Sme persns are invlved in several businesses and/r are emplyed by anther cmpany What des the alumni entrepreneurs value frm their time at Minc? Answers t this questin was cllected thrugh Minc the Bk, a bk where interviews with alumni entrepreneurs can be fund, and a survey and interviews with alumni entrepreneurs frm Minc. There are especially tw things that stands ut when it cmes t what the entrepreneur s value fr the time at Minc. The first is the netwrk they build up during their time at Minc, a netwrk that has been valuable and imprtant many times bth during the incubatr time as well as after exit. There are examples f persns getting t knw each thrugh Minc and then after exit starting new cmpanies tgether. The secnd thing cmmn things that the alumni entrepreneurs described as valuable was t have a place t g t fr wrk where everyne else is in the same situatin as yu are. Minc is described as a great envirnment t wrk where yu get prfessinal supprt, yu get inspired and stimulated thanks t the peple yu have arund yu and that yu get t meet. (Fr full answers see appendix) 29

30 Handling f persnal data The measurement system that is being develped thrugh this thesis will handle data abut the alumni entrepreneur and thereby abut private persns and it is imprtant t understand what restrictins and pssibilities that will incur legally. Fr this matter, the Swedish Persnal Data Act (Persnuppgiftslagen, PUL) has been investigated. Furthermre since this thesis deals with data abut alumni entrepreneurs frm Minc, agreements made between Minc and the entrepreneurs has als been lked in t. Incubatr Agreement Minc The incubatr agreement is an agreement between Minc and the incubatin cmpany. This agreement des nt include the entrepreneurs as legal entities, nly the cmpanies. This means that it des nt state anything abut persnal data and n ther agreements exists that handles this matter. Swedish Persnal Data Act - Persnuppgiftslagen (PUL) Persnal infrmatin in a database is cnsidered structured infrmatin and certain laws and regulatins applies t this actin. When persnal data is cllected the persns cncerned shuld be infrmed f the use the data as well as have the pssibility t access the data cllected abut them. It is the persn gathering the data that is respnsible fr making sure it is dne accrding t the law. Depending n hw the infrmatin is gathered and is intended t be used, the restrictins by the law will differ. Fr example if the infrmatin is nt structured in frmat that is aimed fr searching the handling f persnal data is nt restricted by the main laws, as lng as it is nt vilating the registered persns integrity. In additin, different laws apply fr this thesis since it is cnnected t academia (Datainspektinen, u.d.). 30

31 Develpment f measurement system Thrugh the literature and the empirical data cllected, I have develped a measurement system t use fr measuring the value f an incubatr thrugh its alumni entrepreneurs. In this sectin, the reasning behind the system and the system itself is described. The measurement system was then tested in a case study f the alumni entrepreneurs at Minc. The case study is described in the next sectin. What t include and why The literature review was very hard since this narrw area has nt seen much research yet, prbably because incubatrs are still a fairly new cncept but als since measuring individuals is very difficult and shuld be dne with cautin t ethical aspects as well. Due t the difficulty f finding relevant thery in the narrw field, thery with brader perspectives have been lked int. Accrding t Prter (1998), the envirnment in which a cmpany is wrking is very imprtant fr its develpment. This means that an envirnment such as an incubatr can play an imprtant rle fr the success f a cmpany. As Tangen (2004) writes, it is imprtant that a measurement system supprts the strategic bjectives, which in the case f incubatrs is t create jbs and generate tax incmes. Thereby I see it as necessary t measure hw many jbs and hw much tax incmes the alumni entrepreneurs have been part f creating. It is imprtant t remember that fllwing up the individuals after the incubatr time is nly ne part f measuring the incubatrs perfrmance and thereby this part itself will nt cver all aspects f supprting the strategic bjectives. Saravathy (2001) and Lackéus (2013) amng thers as well as the alumni entrepreneurs themselves describe that the peple are imprtant fr the success f a business. Different traits, skills, attitudes, cmpetencies etc. that are imprtant as an entrepreneur are described by the authrs. Using this as a starting pint means that first entrepreneurial cmpetencies, traits etc. need t be defined and secndly be measured. 31

32 One way t measure these things is t have all the entrepreneurs fill in a questinnaire as they enter the incubatr and then answer the same questins as they make their exit and then answers fr each persn can be cmpared. Ding it like this wuld als assume that entrepreneurial cmpetencies can be taught and learned smething that is nt supprted by all literature but by a large part f it. Fr the develped measurement system in this study, which questins t ask the entrepreneurs are based upn literature abut entrepreneurial cmpetencies, skills, and attitudes et cetera that have already been discussed in the thery sectin. The answers f the questins will f curse be based n hw the persn perceive him/herself which means that the data can be used t cmpare t the individual s wn earlier results. It is imprtant t be cautius abut drawing cnclusins f the verall grup since peple perceive themselves different as well as interpret the questins in different ways. What then can be measured thugh are trends, ne example culd be that the entrepreneurs shw an increase f xx% f hw gd they believe they are at handling setbacks after the incubatin prgram cmpared t befre. Thrugh researching what the persns wh went thrugh the incubatr prgram Minc d tday it is clear that a majrity are invlved in their wn funded r c-funded businesses and nly a minrity are emplyed by larger cmpanies nt funded by themselves. It wuld be very interesting t track and understand hw much impact and effect ne persn has within a larger cmpany. Fr this, Van der Heijdens measurement system might be relevant but further research in the area is necessary fr a measurement in t shw financial value. Due t the fact that mst f the alumni entrepreneurs at Minc are invlved in their wn business/businesses the measurement system will be fcused n these cmpanies. This is nt saying that the peple wrking fr larger cmpanies wuld be less entrepreneurial. Empirical results suggest that the amunt f time between exit frm the incubatr until starting mre cmpanies differs, indicating that the full value measured thrugh the alumni entrepreneurs wn t shw directly, which is imprtant t remember when measuring. Furthermre, sme alumni entrepreneurs are als invlved in ther rganizatins and bards fr which they are nt funding parties but these have nt been included. Alumni entrepreneurs als smetimes invest in ther cmpanies and these have been included in the measurements when the entrepreneur s rle is seen as imprtant fr making the cmpany reach the future. These measures have nly been lked frm the year that the alumni entrepreneur stepped in. The alumni entrepreneur s experiences frm the incubatr time is als imprtant. It is a way f bth understanding the entrepreneurs better as well as t learn hw t imprve as an incubatr. Thereby questins f this matter shuld be asked t the entrepreneurs as well. This culd be in the frm a survey abut hw satisfied the entrepreneurs are abut the incubatr prgram. Frm the answers frm the incubatrs it is clear that this is dne by mst incubatrs already, which is why little effrt has been put n it in this thesis. 32

33 The empirical evidence tells that the expansin f the prfessinal netwrk during the time at the incubatr is very imprtant fr the entrepreneurs. There are a few examples f where peple running different cmpanies in the incubatr get t knw each ther and after exit start cmpanies tgether. This is a measureable benefit f the netwrks imprtance. Asking the alumni entrepreneurs abut hw the netwrk frm the incubatr has been imprtant can definitely be relevant and I believe that culd be gd t include if/when cntacting them fr ther questins. I culd nt find any relevant literature within this area but I chse t include few examples f what I persnally think culd be interesting t measure abut netwrks activities. It can never been knwn hw the entrepreneurs and the cmpanies wuld have dne withut the incubatr. Taking part in the incubatin prgram and even applying culd already shw sme srt f drive and certain persnal traits cmpared t nt applying which wuld make it mre pssible t becme a successful business funder r it may nt. This means that it is extremely difficult t knw what gd measurements are and nt, as well as what t cmpare the measurements with. Nevertheless, this is smething that will remain unanswered since, as said, n ne culd knw what wuld have happened withut the incubatr. Als, it is nt pssible t knw hw much ne persn has cntributed as a funder wh has gne thrugh the incubatr prgram cmpared t anther funder in the same cmpany wh has nt gne thrugh an incubatr prgram and s n. System and prcess Frm the thery, empirical results and the discussin abve I suggest a system cnsisting f tw main parts, which are described belw. I have als include sme thughts abut the netwrk activities and hw t measure them. In the appendix the questins and infrmatin t ask fr is stated in bullet pints. 1) Hw has the entrepreneur changed during the incubatin prgram? T see hw the entrepreneurs develp during the incubatr prgram d a survey when they start the prgram and when they exit in which entrepreneurial cmpetencies, traits, skills, attitudes etc. are asked abut. That survey culd be annymus but still be able t cmpare answers befre and after prgram fr each persn. Persnally, I believe that including demgraphics infrmatin such as age, gender, and backgrund culd be very interesting when analyzing the results fr patterns and trends. 33

34 2) What have the alumni entrepreneurs accmplished/perfrmed/dne/funded/ created since making their exit frm the incubatr? Keep track f what the entrepreneurs d after their exit by a yearly fr them t answer. Put sme time int ging thrugh the financial numbers f interest fr the cmpanies that the entrepreneurs are active in and/r have funded. This als includes financial numbers fr the cmpanies that were run at the incubatr. T make it as time efficient as pssible use numbers that are fficial and easy t get thrugh e.g. retriver-inf.cm. The limit f this will be that infrmatin abut capital attracted and, percentage exprted cannt be answered and sme cmpany frms are nt bliged t have their data fficial. Hwever, it may be wrth putting time and effrt int getting the mst valuable numbers by cntacting the entrepreneurs and the fewer questins yu ask directly t the entrepreneur the easier and faster it will be fr them t answer. Measurements f netwrk activities and measurements f the imprtance f the incubatr fr the entrepreneurs See appendix fr a shrt suggestin f what t ask and measure. This is based n empirical data as well as my wn earlier knwledge since there was a lack f relevant literature. 34

35 Case study at Minc T test and analyze the prcess f the measurement systems as well as t see what results it wuld prvide a case study was carried ut at Minc. Since the time span f this thesis des nt cver the time frm entering Minc t making an exit nly the part abut what the alumni entrepreneurs d was tested. Prcess T find infrmatin abut which cmpanies the alumni entrepreneurs have started, except the nes started at Minc, the alumni entrepreneurs were research thrugh LinkedIn. I als gt address t mst f the entrepreneurs frm Minc and sent the entrepreneurs a survey f what they d tday, a few f them was als interviewed. See appendix fr the questins asked. When the cmpany names, and in sme cases the crprate identificatin numbers, were cllected, I cllected infrmatin abut the cmpanies (see appendix fr details) thrugh Retriever Business. Cmpanies whse financial infrmatin is nt public r available easily was excluded as well as cmpanies started befre the persns went thrugh the incubatin prgram. Als, cmpanies that culd nt be fund by the name given were excluded, fr these cmpanies, searches n Ggle and ther sites were cnducted befre they were excluded. Last, a shrt analysis n the cmpany infrmatin, including financial infrmatin was carried ut. Infrmatin fund thrugh the different surces Surce Persns Ttal n. f peple 114 LinkedIn n/little inf LinkedIn 17 Mail/Interview N answer r N cntact inf 74 Ttal number f answers 40 Relevant inf received thrugh s/interviews and nt fund nline 18 answers effects the fin. numbers 35

36 Results Thrugh the prcess described abve data was cllected and put tgether and the mst imprtant results can are fund here. Ttal Number f new cmpanies: 43 Registratins/year **** New cmpanies/year f exit* ** *** 2009** ** ** * E.g. the alumni entrepreneurs wh made exit 2006 have started 5 cmpanies after exit ** 2 f the cmpanies started have c-funders frm 2 different exit year each, 0.5 has been cunted fr each persn *** Accrding t the infrmatin received frm Minc n ne made an exit in (Althugh that was prbably just an errr and the exit cmpanies were instead included in anther year) **** Since this data was cllected befre the end f 2014 the ttal number fr 2014 may be larger 36

37 Industry segmentatin (accrding t Swedish standard) Data, IT & Telekmmunikatin 12 Juridik, Eknmi & Knsulttjänster, Knsultverksamhet avseende företags rg. 5 Partihandel 5 Inf ej tillgänglig än 4 Reklam, PR & Marknadsundersökning, Reklam, PR, Mediebyrå & Annnsförsälj. 3 Tekniska knsultverksamhet 3 Bygg-, Design- & Inredningsverksamhet, Industri- & Prduktdesignverksamhet 2 Kultur, Nöje & Fritid 2 Företagstjänster, Databehandling & Hsting 2 Bank, Finans & Försäkring, Kreditgivning, övrig 1 Detaljhandel, Pstrder- & Internethandel 1 Media, Film, Vide & TV 1 Mtrfrdnshandel, Persnbilar & Lätta Mtrfrdn, Handel 1 Utbildning, Frskning & Utveckling, Persnalutbildning 1 Gegraphical Base segmentatin Skåne Län 38 Stckhlms Län 2 Hallands Län 2 Västra Götalands Län 1 37

38 Ttal Financial Numbers (ksek) f the 43 cmpanies YEAR Turnver 2014***** Prfit/Lss (Resultat) Out f which is prfit ***** Financial infrmatin fr 2014 is nt yet available Out f which is lss N. f emplyees Salary csts Taxes ut f salaries (25%) Scial csts TOTAL

39 Discussin and cnclusins First, it is impssible t knw what wuld have happened with the persns and cmpanies if they were nt taking part in the incubatin prgram. This is smething that wuld be very interesting t lk int f curse but it wuld als require significant amunt f effrt. Entrepreneurship and ecnmic grwth There are several surces saying that entrepreneurship and yung businesses has a psitive impact n ecnmic grwth. This is especially true fr pprtunity-based entrepreneurship, which is what mst entrepreneurship in Sweden is tday. Prter (1998) describes that the envirnment where a cmpany wrks is very imprtant and this is cnsistent with the empirical data cllected frm the alumni entrepreneurs. The cnclusins I draw frm this is that it is imprtant fr sciety t create an envirnment where new business can grw. Incubatrs thereby have an imprtant rle t play and can really cntribute t sciety and the ecnmic grwth. Frm the research cnducted abut what the entrepreneurs value frm their time at Minc the cnclusin I make is that thanks t the peple yu meet, yu wrk with, yu interact with, the nes wh questin yu, etcetera, yu develp as an entrepreneur and s d yur cmpany and yur idea. This is als cnsistent with what much thery states. Sme research als states that entrepreneurship can be learned and taught, which wuld be cnsistent with the way incubatrs say that they cach peple and that the entrepreneurs learn during the incubatr prgram and this then als makes measurements f the entrepreneurs relevant. But, t quantify and put numbers, especially financial nes t shw ecnmic grwth, n this is very difficult, which is why I believe that yu smehw need t lk at things cnnected t the peple that can be quantified such as cmpanies funded and what the entrepreneurs d. This is als the main reasn that these are the nly financial numbers I have cme up with s far. 39

40 The measurement system As the literature abut measuring systems suggest, a gd perfrmance measurement system cnsists f several parts that preferably shuld be bth financial and nn-financial (Tangen, 2004). Sarasvathy (2001) and Lackéus (2013) bth states that entrepreneurship can be taught, which I have taken use as the grund f the measurement system since the incubatrs believe that their entrepreneurs learn things when cached during the incubatin prgram. If it wuld shw that it cannt be taught much f this develped system as well as the cncept f incubatrs itself wuld nt be wrth investing in fr sciety. I chse t develp a system that asks 1) hw the entrepreneurs have changed and what they have learned during the incubatr prgram and 2) what the entrepreneurs d after exit and put it int financial numbers f their relevant cmpanies. Thereby this system cnsist f bth financial and nn-financial measurements. The difficulty with 1) is that the answers can be difficult t interpret fr the persn analyzing the results cmpared t the answers f 2). Fr bth parts, it is imprtant that the data cllected will cntribute in sme way, directly r indirectly, t the incubatrs, because carrying ut the measurements will f curse require resurces. Thereby sme f the things I suggested may be better t take away and f curse, ther things might be added. Imprtant t state is that this system des, f curse nt, cver all imprtant measurements f an incubatr. This first versin f the measurement system I see at rugh prttype that needs t be tried and iterated many times and will always need t be develped since an incubatr always develps. I suggest that anyne wh wants t use the system develped shuld als learn and read mre abut hw t make a survey. This is smething that I unfrtunately did nt have time t d but smething that can imprve the system a lt. It is imprtant t have a structured prcess fr fllwing up, measuring, and analyzing the results as well as t develp as an incubatr. Hwever, the infrmal talks and discussins are als very imprtant, smething that the alumni entrepreneurs thught wrked very well at Minc. 40