Jumping to Conclusions: A Theory of Decision-Making at Technology Incubators

Abstract

The technology incubation process is used for taking nascent ideas through to market-based commercialisation. The client selection decision is arguably the most important stage in this process. The predominant view in the literature is that client selection ought to be carried out using robust selection criteria linked to critical success factors. The results of this research question the value of such approaches. Assessors at incubators do not follow a wholly rational process linking client attributes to critical success factors. Instead, a combination of both rational and non-rational or intuitive processes help assessors chose clients which 'appear' most promising on a range of both written and un-written criteria. Due to limitations inherent in traditional information collection mechanisms, assessors consistently use 'stereotyping' and 'attribute substitution' to make selection decisions. A new 'entrepreneurial readiness' heuristic was discovered and the reasons behind the strategic misalignment between client selection outcomes and incubator service portfolios is explained.