Tales Andreassi, Professor of Entrepreneurship and Deputy-Dean of FGV-EAESP, Brazil, opens up his research into incubators and start-up survival. Studying the insides of incubators reveals a key factor as to whether their start-ups succeed or fail. 

Exploring the Incubator’s Black Box by Tom Gamble. Related research: Being flexible through customization – The impact of incubator focus and customization strategies on incubatee survival and growth. Johanna Vanderstraeten, Arjen van Witteloostuijn, Paul Matthyssens, Tales Andreassi.

The smaller they come, the quicker they fall

It’s an exceptional fact: politicians, economists, academics and professionals themselves all agree on one thing. The thing in question? That new business brings adrenaline to a country’s economy and helps it stride onwards towards growth. But despite this, start-ups suffer – from both newness on the market, their smallness, lack of legitimacy and connections, fewer resources and less access to knowledge than their grown-up counterparts – and this suffering often provokes a high failure rate. This high failure rate – 30-40% in their first year according to OECD figures – can actually spur governments to try to compensate for market failures, one type of state intervention being the nurturing of start-ups in business incubators.

This all sounds very good news for those buzzing with a business idea and ready to create their company. However, there is a glitch. Both practitioners and policy-makers alike have little in-depth knowledge about incubators. Moreover, academic research has only just begun to scratch the surface of understanding on incubators’ internal operations and service offering. To quote Sean M.  Hackett and David M. Dilts, respectively of Waseda University and Dilts & Partners, a consulting firm, ‘it is not surprising that an incubator’s internal service offering is often referred to as part of a “black box”’.

Does the specialized incubator guarantee success for startups?

Not knowing the reasons for success or failure in hatching sturdy new businesses is analogous to an entrepreneur with a great idea but without a market survey, business model or business plan. Tales Andreassi, Professor at FGV-EAESP, one of South America’s leading academic institutions, decided to open the black box further together with fellow researchers Johanna Vanderstraeten, Arjen van Witteloostuijn, and Paul Matthyssens from the University of Antwerp. What they probed about for was an insight into the relationships between an incubator’s industry focus and its degree of service customization. This, they thought, might actually pinpoint a key factor indicating the capacity of an incubator to foster successful start-ups.

• Read Part 2 of this article: Opening up the incubator’s black box

Useful links:

• Link up with Tales Andreassi on LinkedIn
• Read a related article: An entrepreneur’s journey
• Visit the FGV-EAESP website and apply for a degree programme

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