Accelerator expertise: Understanding the intermediary role of accelerators in the development of the Bangalore entrepreneurial ecosystem

• DOI: http://doi.org/10.1002/sej.1281
• Date: 01 March 2018
• Author: Ketan Goswami,Suresh Bhagavatula,J. Robert Mitchell
• Published date: 01 March 2018

SPECIAL ISSUE ARTICLE

Accelerator expertise: Understanding the

intermediary role of accelerators in the

development of the Bangalore entrepreneurial

ecosystem

Ketan Goswami

1

| J. Robert Mitchell

1

| Suresh Bhagavatula

2

1

Richard Ivey School of Business, University

of Western Ontario, London, Ontario, Canada

2

Indian Institute of Management Bangalore,

Bangalore, India

Correspondence

Ketan Goswami, Richard Ivey School of

Business, University of Western Ontario,

1255 Western Road, London, ON N6G 0N1,

Canada.

Email: kgoswami.phd@ivey.ca

Research Summary: To understand the intermediary role of accelera-

tors in the developing regional entrepreneurial ecosystem of Banga-

lore, we analyze data from 54 interviews with accelerator graduates,

accelerator managers, and other ecosystem stakeholders and from

49 websites, 13 online video interviews, 26 online news sources, and

301 pages of policy documents. Specifically, we adopt a socially situ-

ated entrepreneurial cognition approach to theorize how accelerator

expertise, existing at a meso-level, intermediates between (micro-

level) founders and the (macro-level) ecosystem. In our model, four

types of accelerator expertise—connection, development, coordina-

tion, and selection—together increase stakeholders’commitment to

the entrepreneurial ecosystem, leading to venture validation (success

or failure) and ecosystem additionality. These findings indicate that

accelerators contribute to ecosystems in a way that is distinct from,

but supportive of, building individual ventures.

Managerial Summary: Accelerators are a new form of entrepre-

neurial support organization. These organizations typically focus

on developing individual start-ups, but we find that they also help

develop entrepreneurial ecosystems. They do so by acting as a

bridge between start-ups and the broader entrepreneurial environ-

mental resources by: (a) helping form connections, (b) helping

develop individual start-ups, (c) helping coordinate the right match

among the various players in the ecosystem, and (d) helping select

mentors and founders with the appropriate motivation and knowl-

edge. As these accelerators apply this expertise in this go-between

role, they help build commitment to the broader ecosystem. Fur-

thermore, they enable success (or fast failure) of individual start-

ups and do so in a way that develops the overall entrepreneurial

capacity of the broader entrepreneurial ecosystem.

Received: 1 December 2015 Revised: 19 April 2017 Accepted: 25 April 2017 Published on: 04 January 2018

DOI: 10.1002/sej.1281

Copyright © 2017 Strategic Management Society

Strategic Entrepreneurship Journal. 2018;12:117–150. wileyonlinelibrary.com/journal/sej 117

KEYWORDS

accelerators, ecosystem intermediation, entrepreneurial

ecosystems, entrepreneurial expertise

Silicon Valley’s entrepreneurs failed to recognize the connection between the institutions they had built

and their commercial success...What appeared to both actors and the outside world to be the outcome of

individual entrepreneurial achievement and competitive markets was in fact the result of a complex,

highly social process rooted in an industrial community. (Saxenian, 1994, pp. 56–57)

1|INTRODUCTION

Notwithstanding the heroic portrayals of individual founders (e.g., Steve Jobs) or individual firms (e.g., Google),

research supports an “ecosystem”-based view of entrepreneurship (Adner & Kapoor, 2010; Autio & Thomas, 2014;

Moore, 1993). This view takes into account the dynamic interplay between macro-institutional factors and micro-

individual actions (Van De Ven, 1993). As Saxenian (1994) highlighted, institutions situated in such broader ecosys-

tems influence the success of entrepreneurial ventures. Past research has demonstrated the importance of institu-

tions such as universities, incubators, and government agencies in connecting various actors in an ecosystem (see

Etzkowitz, 2008). Beginning with the establishment of Y Combinator in 2005, accelerators represent another emerg-

ing institution that can play a transformative role in the development of ventures and entrepreneurial ecosystems

(Cohen & Hochberg, 2014; Gonzalez-Uribe & Leatherbee, 2015; Pauwels, Clarysse, Wright, & Hove, 2016).

Because accelerators are a nascent phenomenon in entrepreneurship (Cohen, 2013b), much of the recent

research has sought to understand what they are, what they do, and whether they deliver on the promise to accel-

erate ventures (Hallen, Bingham, & Cohen, 2014). Accelerators have been defined as “fixed-term, cohort-based pro-

grams, including mentorship and educational components, that culminate in a public pitch event, often referred to

as a ‘demo-day’” (Cohen & Hochberg, 2014, p. 4). They are distinct from the broader policy tool known as technol-

ogy business incubation (TBI), which generally focuses on promoting technology transfer and diffusion of products

and which may or may not use accelerators as one of the many mechanisms for meeting these goals (Lamine et al.,

2016; Mian, Lamine, & Fayolle, 2016). For example, science parks and university technology transfer departments

may also serve this purpose (Mian et al., 2016). Accelerators are further distinct from incubators in their structure

and focus (see Cohen, 2013b; Pauwels et al., 2016). While incubator participation is often longer in duration, not

necessarily competitive, and is often funded through rental income or government funding for non-profits (Cohen,

2013a; Mason & Brown, 2014), the general purposes of accelerators include: (a) “identification of investment

opportunities,”(b) “matching [of] customers with start-ups”and (c) “stimulation of start-up activity and economic

development”(Clarysse, Wright, & Van Hove, 2016; Pauwels et al., 2016, p. 8).

Despite significant progress toward understanding the structural (what) elements of accelerators, such as their

components (Cohen, 2013b; Gonzalez-Uribe & Leatherbee, 2015; Mejia & Gopal, 2015) and purposes (Clarysse,

Wright, & Van Hove, 2015; Yusubova & Clarysse, 2016), there remains a limited understanding of their process

(how) elements (see Yusubova & Clarysse, 2016). Specifically, there is limited understanding regarding how accelera-

tors can simultaneously develop both entrepreneurial ventures and regional entrepreneurial ecosystems (see

Cohen & Hochberg, 2014). Further, while there is extensive research on incubators’role in developing entrepre-

neurial ecosystems (Clarysse, Wright, Lockett, Van de Velde, & Vohora, 2005; Dutt et al., 2016; Mian, 1997; Phan,

118 GOSWAMI ET AL.

Siegel, & Wright, 2005), there is limited research addressing accelerators’role in developing entrepreneurial ecosys-

tems (see Clarysse et al., 2016).

In this article, we adopta process-focused lens and an interpretive qualitative approach (Denzin & Lincoln, 2005)

to develop an inductive model (Strauss & Corbin, 1990) that explores the role of accelerators in the developmentof a

regional entrepreneurial ecosystem. Because cognitive approaches have been found to be helpful in understanding

entrepreneurial ecosystems (Nambisan & Baron, 2013), we turn to dynamic socially situated cognition (Mitchell,

Randolph-Seng,& Mitchell, 2011; Smith & Semin, 2004) asa way of understanding the cognitiveunderpinnings of the

intermediationprocesses (Howells, 2006; Kistruck, Beamish, Qureshi, & Sutter, 2013) thataccelerators can facilitate.

Thus, we address two primary research questions: (a) How do accelerators affect venture success or failure?; and (b) How

do accelerators affect regional entrepreneurial ecosystems? OuranswersbuildonamodelbySmith,Mitchell,andMitchell

(2009) that extends expert information processing theory to inform the interrelationships between analogous constructs at

multiple levels of analysis (individual level and economy level) (Chan, 1998). Specifically, we embed accelerators at the

meso-level of analysis as a way of understanding their socially situated role (Mitchell et al., 2011; Smith & Semin, 2004) in

ecosystem intermediation. This allows us to better understand how accelerators act as a socially situated cogniti ve bridge

between the “individual”and the individual’s“context”(see Autio, Kenney, Mustar, Siegel, & Wright, 2014).

Through inductive research involving 54 interviews and a variety of published sources, we aim to make three contri-

butions. First, we contribute to the emerging literature on accelerators by elucidating “how”accelerators help develop

ventures at the micro-level, increase commitment to the regional entrepreneurial ecosystem at the meso-level, and help

develop ecosystems at the macro-level. Second, we contribute to the growing area of research that investigates the

underpinnings of entrepreneurial ecosystems by highlighting the role accelerators can play in affecting performance out-

comes related to venture validation (success or failure) as well as the development of the regional entrepreneurial eco-

system. Third, we contribute to entrepreneurial cognition research by offering a deeper understanding of the cognitive

underpinnings of the socially situated ecosystem intermediation processes that support such performance outcomes.

2|THEORETICAL UNDERPINNINGS

2.1 |Entrepreneurial ecosystems

As the earlier Saxenian (1994) quotation illustrates, although individuals and markets matter, every “industrial commu-

nity”contains complex social processes that also shape the outcomes of micro-level entrepreneurial action. To capture

this complexity, scholars have called for more dynamic approaches to studying entrepreneurial processes (Phan et al.,

2005; Smith et al., 2009; Van De Ven, 1993). Research along these lines included the initial work of Moore (1993) on

business ecosystems which, in turn, led to research on the importance of innovation ecosystems (Autio & Thomas,

2014; Nambisan & Baron, 2013) and regional entrepreneurial ecosystems (

Acs, Autio, & Szerb, 2014; Parthasarathy &

Ranganathan, 2011). Mason and Brown (2014, p. 5) defined an entrepreneurial ecosystem as “a set of interconnected

entrepreneurial actors...institutions...and entrepreneurial processes which formally and informally coalesce to connect,

mediate, and govern the performance within the local entrepreneurial environment.”In turn, entrepreneurial ecosystems

support the emergence of new firms through “the incessant formation of a multitude of specialized, diverse entities

which feed off, support, and interact with one another”(Bahrami & Evans, 1995, p. 63). Thus, ecosystem-based views of

entrepreneurship reflect a dynamic and socially complex aspect of action and interaction in the entrepreneurial process.

2.2 |Socially situated cognition and expertise

Another stream of research that emerged to address dynamic aspects of action focused on entrepreneurial cognition, or

“the knowledge structures that people use to make assessments, judgments, or decisions involving opportunity evalua-

tion, venture creation, and growth”(Mitchell et al., 2002, p. 97). Representing a variety of “complementary”perspectives

that “spring from common roots”(Mitchell et al., 2007, p. 7), this research primarily includes: (a) the heuristics-based

GOSWAMI ET AL.119