How business accelerators impact startup’s performance: Empirical insights from the dynamic capabilities approach

Intangible Capital IC, 2020 – 16(3): 107-125 – Online ISSN: 1697-9818 – Print ISSN: 2014-3214 https://doi.org/10.3926/ic.1669 How business accelerators impact startup’s performance: Empirical insights from the dynamic capabilities approach Celia Polo García-Ochoa , Carmen De-Pablos-Heredero , Francisco José Blanco Jiménez Rey Juan Carlos University (Spain) [email protected], [email protected], [email protected] Received July, 2020 Accepted November, 2020 Abstract Purpose: Accelerators are seen as powerful entities that provide critical support to startups in their development. However, little is known about the acceleration practices by which they help their startups. The present study has as its aim to investigate whether business accelerators do assist their startups in the generation of their dynamic capabilities and in their performance and which processes and organizational routines of accelerators programs become effective drivers. Design/methodology: Drawing from the dynamic capability perspective, this empirical research explores the impact of business acceleration programs in their startups by applying a Canonical discriminant analysis using data from 24 Spanish business accelerators. Findings: This study reveals that certain accelerators practices indeed enhance startups’ dynamic capabilities. Further, absorption, integration, and innovation capabilities had a positive influence on startups’ performance while sense the market capability showed a negative one. These findings enable us to identify which business acceleration practices lead to better startups’ performance improvements. Research limitations/implications: This is a preliminary attempt to help in the untangling of the dynamic capability and the business incubation black box. The cross-sectional design of the study and the fact that the data was gathered from a single country and based on survey results in bias and in a limited generalization of its findings. Practical implications: This research can help decision makers’ in business accelerators to put in practice organizational mechanisms aimed to be more successful in their objectives. Originality/value: This study is pioneer to empirically analysis the relationship between business accelerators’ practices and the generation of dynamic capabilities. Keywords: Accelerators, Entrepreneurship, Start-ups, Dynamic capabilities Jel Codes: L26, M13 -107- Intangible Capital – https://doi.org/10.3926/ic.1669 To cite this article: Polo García-Ochoa, C., De-Pablos-Heredero, C., & Blanco Jiménez, F.J. (2020). How business accelerators impact startup’s performance: Empirical insights from the dynamic capabilities approach. Intangible Capital, 16(3), 107-125. https://doi.org/10.3926/ic.1669 1. Introduction Business accelerators are organizations aimed at enhancing the capabilities of startups through educational programming and processes (Clarysse, Wright, & Hove, 2015; Pauwels, Clarysse, Wright & Van Hove, 2016). They are structured to provide an intensive, fixed-term educational program which includes mentoring and networking for the cohort of startups selected, to help them reach key milestones (Hallen et al., 2019). The processes embedded in these programs have the capacity to facilitate growth of startups. They play a “transformative role” in the development of new ventures (Goswami, Mitchell & Bhagavatula, 2018). All in all, one can argue that business accelerators may foster the development of startups’ dynamic capabilities, defined as: acquired abilities which enable firms to integrate, develop and reconfigure both internal and external resources and ordinary capabilities in the manner regarded as appropriate by the entrepreneur (Madsen, 2010) The importance of the development of dynamic capabilities by new firms is recognized in the literature (Jones, Macpherson & Jayawarna, 2013; Newbert, 2005; Zahra, Sapienza & Davidsson, 2006). They allow new firms to sense and respond to changing market conditions and operational or strategic crises (Jones et al., 2013) and thus, they improve the likelihood of sustaining their growth (Telussa, Stam & Gibcus, 2006) and maximizing their goals (Zahra, Sapienza & Davidsson, 2006). They can’t be bought, they are created and developed over time by organizational processes adopted by start-ups (Corner & Wu, 2012; Teece, Pisano & Shuen, 1997) and may be learnt (Eisenhardt & Martin, 2000; Teece et al., 1997; Zahra et al., 2006). To assess the “prodigious ability” of business accelerators to support startups’ growth (Brown, Mawson, Lee & Peterson, 2019), it is therefore critical to study whether and how the processes embedded in business accelerators programs influence the development of startups’ dynamic capabilities. Therefore, the aim of this paper is to study whether business accelerators do assist their accelerated startups in the generation of dynamic capabilities. The paper is organized as follows: First, we develop a theoretical framework and the research hypotheses. Then, we describe the methodology used in this study followed by the results obtained using primary data from 24 Spanish accelerators, one of the leading European countries for nurturing startups (Mobile World Congress, 2019). In the last section, the empirical findings are discussed, the study’s limitations are also addressed, and future lines of research are finally described. This study contributes to the literature in different ways. First, there is a lack of a consistent theoretical perspective to study accelerators (Pauwels et al., 2016) and also, more empirical work on the determinants of startup’s performance is needed (Hausberg & Korreck, 2018; Smith & Hannigan, 2015). In this paper, a deep understanding of how multiple accelerator’s actions may impact the performance of startups is built. The dynamic capabilities approach is used to understand how processes and organizational routines of accelerators programs become effective drivers for superior performance. To our knowledge, this is the first study that analyses this relationship. Therefore, our study fills an important gap in the literature showing how concepts from the dynamic capabilities’ approach can strengthen the accelerators literature. Data enabled us for the first time to connect specific organizational actions oriented to the deployment of dynamic capabilities with results in the process of venture creation within an accelerator. Second, we explore how business accelerators support startups’ growth, answering recent calls (Gonzalez-Uribe & Leatherbee, 2016; Smith & Hannigan, 2015; Wright & Drori, 2018) for in-depth examination of the mechanisms through which accelerators foster the development of startups. Our results show that business accelerators can enhance the development of startup’s DC and as a result, startup’s performance, revealing a new potential role of business accelerators previously not acknowledged. -108- Intangible Capital – https://doi.org/10.3926/ic.1669 Also, we extend the research on dynamic capabilities to startups, a field with limited academic research (Deeds, DeCarolis & Coombs, 1999; Newbert, 2005), which represents a theoretical contribution to the DC perspective by enhancing our understanding of the direct effects of this view across entrepreneurial settings. Finally, highlighting which specific accelerators’ practices have positive effects in startups has practical implications for policymakers and business accelerator directors. In this sense, this research can help decision makers’ in business accelerators to put in practice organizational mechanisms aimed to be more successful in their objectives. 2. Theoretical framework and hypotheses Our theoretical framework to develop a better understanding of how business accelerators impact their accelerated startups draws from the Dynamic Capabilities approach (Jones, Macpherso & Jayawarna, 2014; Teece et al., 1997; Zahra et al., 2006). This perspective emerges in response to shortcomings of the classic Resource- Based View (Wernerfelt, 1984) concerning a static approach and insufficient basis for explaining the strategic adaptation of firms when business environment shifts (Eisenhardt & Martin, 2000; Winter, 2003). The dynamic capabilities view extends resource-based view by addressing the evolutionary nature of firm resources and capabilities in relation to environmental changes and enabling identification of firm processes that are critical to firm evolution (Wang & Ahmed, 2007) and also, to value creation potential (Wójcik, 2015). Dynamic capabilities are acquired abilities which enable firms to integrate, develop and reconfigure internal and external resources and ordinary capabilities in the manner, assumed as appropriate by the entrepreneur (Madsen, 2010). They are thus organizational and strategic routines developed through organizational learning and molded by path dependencies, complementary assets, and industry opportunities (Teece et al., 1997) by which managers recombine their resources to generate new value-creating strategies as markets emerge, collide, split, evolve, and die” (Eisenhardt & Martin, 2000, p. 1107). As a result, dynamic capabilities have the potential to influence a firm’s performance (Hernández-Linares, Kellermanns & López-Fernández, 2018). In the entrepreneurship context, the ability to generate these capabilities at an early stage will improve the likelihood of a sustained growth for the new firm (Telussa et al., 2006) as they help them face their liabilities and challenges (Jones et al., 2013. For example, Wu (2007) confirmed that resource availability and their integration and reconfiguration played a critical role to enhance the performance of the high-tech startups he studied. Also, Macpherson, Jones, and Zhang (2004) case study of a startup, identifies dynamic capabilities as a key antecedent to innovation and growth. Their investigation shows how a firm’s resource capacity is expanded by building an effective business network and also, how this network allows to respond flexibly to customers’ needs and to exploit opportunities quickly. The underlying assumption is that startups that use dynamic capabilities, will maximize their goals (Zahra et al. 2006) and enhance their performance outcomes (Hernández-Linares et al., 2018). Business accelerators are a notable phenomenon in the startup’s landscape (Wright & Drori, 2018). They provide startups with a time-limited, cohort-based value-adding program of monitoring, mentoring and networking (Clarysse et al., 2015; Miller & Bound, 2011). These programs orchestrate resources and deploy strategic processes to enhance startups’ capabilities and expose them to markets and institutions with the objective (Wright & Drori, 2018) of facilitating their development and improving their chances to succeed (Pauwels et al. 2016). Given that business accelerators are organizations aimed at supporting startups by providing them the inputs needed to enhance their performance and succeed (Goswami et al., 2018; Pauwels et al., 2016; Yusubova & Clarysse, 2016), one could argue that by helping startup generate their dynamic capabilities, they would be achieving their ultimate goals. Therefore, we assume a direct relationship between business accelerators and the generation of startups’ dynamic capabilities and thus, in their performance. Even though there is evidence which demonstrates that business accelerators can have positive effects on startups’ performance (e.g. Battistella, De Toni & Pessot, 2017; Hallen et al., 2019; Shankar & Shepherd, 2019; -109- Intangible Capital – https://doi.org/10.3926/ic.1669 Smith & Hannigan, 2015), there remains a limited understanding of the processes and practices by which they accomplish these outcomes (Wright & Drori, 2018). According to Hackett and Dilts (2004), the dynamic capabilities can be viewed as an appropriate framework to “facilitate inquiries into the way in which business incubators build new venture development resources and capabilities and allocate these resources to the transformation of startups into value-producers” (Hackett & Dilts, 2004, p. 46). Also, they mentioned that “a dynamic capabilities approach would serve as a strong theoretical foundation for studies centered on development strategies of incubatees, and new ventures writ large.” (Hackett & Dilts 2004, p. 46). Both business incubators and accelerators have been acknowledged by policymakers, private investors, corporations and academics, as effective ways to support the creation of new firms and deal with their needs in their early stages (Pauwels et al., 2016; Yang, Kher & Lyons, 2018) so, we believe that the dynamic capabilities view is also an appropriate lens to analyse the processes embedded in business accelerator programs and explore their outcomes. In line with recent studies (Hernández-Linares et al., 2018; Hidalgo-Peñate, Padrón-Robaina & Nieves, 2019; Rao, Chandy & Prabhu, 2008) we adopt a multidimensional view of dynamic capabilities which focus on four types of dynamic capabilities. Specifically, we propose that the processes and resources embedded in business accelerator programs contribute to the generation of the dynamic capabilities of sensing the market, absorption, integration, and innovation in their startup’s portfolio. Although this study is pioneer to link business accelerators’ practices and the generation of dynamic capabilities, there are recent studies that support the relationship proposed between these four dynamic capabilities and firm’s performance (e.g. Bastanchury-Lopez, De Pablos Heredero, García-Martínez & Martín-Romo Romero, 2019; Blanco-Callejo & De-Pablos-Heredero, 2019; De Pablos Heredero, Fern & Blanco-Callejo, 2017; De Pablos Heredero, García & Martín-Romo, 2019; De-Pablos-Heredero & Lopez Berzosa, 2012) These studies support our argument that these dynamic capabilities need to be developed by startups through business acceleration processes in order to succeed in the market. We outline the main effects of business accelerators on startup’s development based on the four dynamic capabilities as well as their effects on startups’ performance. 2.1. Sensing the market capability Not all the opportunities are viable (Song, Podoynitsyna, Van Der Bij & Halman, 2008) so being able to identify and select the right ones for new businesses development is among the most important abilities of a successful entrepreneur (Ardichvili, Cardozo & Ray, 2003). When an opportunity shows up, entrepreneurs are expected to figure out how to interpret new events and developments, which technologies to pursue, and which market segments to target (Teece, 2007). Thus, to take advantage of these potential benefits and turn them into realized outcomes, it is necessary to develop a sensing the market capability (Zhang & Wu, 2013). The sensing capability is defined as the firm’s ability to identify, interpret and assess opportunities in the environment (Pavlou & El Sawy, 2011; Teece, 2012). This capability requires being continuously probing markets and listening to customers in order to understand latent demand, as well as the evolution of industries and markets, and the supplier and competitor responses (Leih, Linden & Teece, 2014). This means that information alone does not result in better outcomes, firms need to put in place various processes “to gather, filter, and make sense of information” from both inside and outside the enterprise (Teece, 2007, p. 1326). Also, it has a positive influence on achieving more innovative products, faster speed to market (Zhang & Wu 2013) and improving new venture performance (Jiao, Alon & Cui, 2011). However, startups lack of experience to interact with their environment and information asymmetries (Garcés & Mkheidze, 2018). Moreover, startups do not tend to predict accurately opportunities or how to address them, so as a result they need to adapt and modify their approach over time (Sommer, Loch & Dong, 2008). -110- Intangible Capital – https://doi.org/10.3926/ic.1669 Participation in business accelerators programs force startups to deal with the challenges regarding the viability of their business models by guiding and helping startups refine and advance in their product-market concept (Kohler, 2016; Liao, Kickul & Ma, 2009; Wright & Drori, 2018; Yang et al., 2018). Programs are structured in a way that allows startups to focus on solving problems related to technology/product issues and gaining a deeper understanding of their clients/market (Wright & Drori, 2018). It infers that business accelerators help their startups to develop their capability of sensing the market and thus improve their performance by promoting the use of a systematic process, identifying and assessing firm’s business opportunities, enabling them to produce the right products or services, targeting the right markets, addressing consumer needs, and leveraging the opportunity found. Accordingly, we hypothesize the following: H1: Accelerator influences the relationship between startup’s sensing the market capability and its performance. 2.2. Absorptive capability In general, knowledge is power to all firms. However, the firms’ capacity to perform depends on the relevance of this knowledge to the firm and how it is processed (Debrulle, 2012). As such, a firm’s absorptive capability or its ability to identify new external information, assimilate and use it for organizational advantage is key to strengthen their competitive position and thus, to improve their survival (Keh, Nguyen & Ng, 2007; Lane & Lubatkin, 1998; Lumpkin & Katz, 2007; Sapienza, Autio, George & Zahra, 2006; West & Noel, 2009; Zahra & George, 2002) This capability is especially important for startups (Debrulle, 2012). Because they are challenged by a lopsided knowledge base, few capabilities and a limited capacity to develop them are found, hence they present a higher need for new knowledge (Debrulle, 2012). The startups’ absorptive capability can help to generate this required knowledge. A startup’s absorptive capability is thus the processes to recognize the value of new external knowledge, to acquire it, and to transform it into productive, valuable, and firmspecific learning outcomes directly relevant to its activities (Cohen & Levinthal, 1990; Lane & Lubatkin, 1998). This utilization involves a journey from the identification and acquisition of external knowledge, through its assimilation and to the understanding of its application in a commercially viable way (Cohen & Levinthal, 1990). The greater the extent to which startups have clear routines through which knowledge is accessed, stored, and transferred in them, the greater is their absorptive capability (Debrulle, 2012). Business accelerators programs are focused on intense education, interaction, and monitoring (Pauwels et al., 2016). The educational support includes sessions with experts designed to provide specific knowledge related to managing and operating a new venture firm (Wright & Drori, 2018). There are also other learning opportunities related to learning from cohorts, mentors or stakeholders (Goswami et al., 2018). Mentorship is “a key ingredient” for a successful startup (Hoffman & Radojevich-Kelley, 2012, pp 58). Mentoring services vary from individual sessions on an as-needed basis to programmed group-meetings. These individual and group advising sessions provide startups with business assistance, guidance to solve problems, analyse failures, learn from peers who have overcome similar obstacles and enable the accelerator management team or mentors to monitor their progress (Pauwels et al., 2016; Stross, 2012). By doing this, business accelerators help startups to absorb and apply the knowledge they gather through the program as they allow them to adequately understand and process this knowledge for its future application (Chen, Lin & Chang, 2009; Lumpkin & Katz, 2007). Also, startups are exposed to intense and close interactions to varied communities of stakeholders that allows them to get target feedback (Wright & Drori, 2018). These business accelerator routines facilitate the startups’ knowledge acquisition. They expose them to new and adequate information, helping them share, interpret and apply it rapidly, enabling them to enhance their absorptive capability, maximizing the startups’ efforts to improve their performance. We therefore suggest: H2: Accelerator influences the relationship between startup’s absorptive capability and its performance -111- Intangible Capital – https://doi.org/10.3926/ic.1669 2.3. Integration capability As an emerging business gradually becomes defined, continuous adaptation and market validation is needed (Roseno, Enkel & Mezger, 2013). Thus, the new business creation process is not a straightforward process as it involves a great deal of iterations (Juntunen, 2017). These iterations or reconfigurations rely on the firm’s capability to integrate new resources and assets including knowledge with those internally generated to revamp routines and practices (Pavlou & El Sawy, 2011). Hence, integrative capability helps startups achieve a positive interaction among different resources by converting them into comprehensive sets of value-creating organizational skills aligned with external environment (Wang & Ahmed, 2004) As mentioned before, one of the most valuable aspects of business accelerator programs is the provision of mentoring to startups (Battistella et al., 2017). Mentoring is a learning and coaching process where a reciprocal relationship is built between mentor and startup while focusing on achievement (Wright & Drori, 2018). Mentors are experienced entrepreneurs or experts who share their knowledge and skills with startups (Cohen & Hochberg, 2014). Within mentoring routines, startups learn and progress through conversations with feedback loops between mentor and entrepreneur that foster the development of the startup toward their full potential (Fowle & Tyne, 2017). By doing so, startups are involved in cycles of constant monitoring and adjustment by combining their new and existing knowledge in solutions to confront their obstacles quicker and solve uncertainties as they emerge. This intense interaction with the mentors leads to a continuous knowledge integration and its systematic application that allows startups teams to explore different options and to adapt their business model in order to create a profitable business. Beyond mentors, accelerators’ teams also routinely monitor startups progress through dedicated follow-ups sessions or evaluation times (Cohen, 2013; Polo-García-Ochoa, 2020). In these events, startups report their progress and challenges forcing them to show progress and evolve in each session due to what some authors call the “the power of shame avoidance” (Stross, 2012). This prods them to be willing to learn and constantly integrating that learning into their working routines as they would not want be embarrassed themselves by showing little progress (Stross, 2012). Thanks to these routines of continuous evaluation and surveillance within a short period of time, the integration capability of startups is enhanced. Thus, we hypothesize: H3: Accelerator influences the relationship between startup’s integration capability and its performance 2.4. Innovation capability A firm’s ability to innovate is a critical factor for its survival and success (Akman & Yilmaz, 2008; Monferrer, Blesa & Ripollés, 2013; Wang & Ahmed, 2004). Innovation capability perspective focuses on the outcomes of organizations (i.e., products, services, markets, business models) (Saunila & Ukko, 2014). However, the innovation capability of a company can be understood from a more global perspective taking into account all its dimensions. In this sense, the innovation capability of a firm is its ability to develop new products and markets, by aligning an innovative strategic orientation with innovative processes and behaviors (Wang & Ahmed, 2004). Based on the above definition, innovation capability is a multi-faceted construct (Saunila & Ukko, 2014) that goes from technological to human aspects (Prajogo & Ahmed, 2006). Because the processes and resources that startups experience and acquire throughout their lifecycle within a business accelerator, their innovation capability is enhanced. Entrepreneurs are vehicles to make innovation happen (Gonthier & Chirita, 2019). However, creative ideas by themselves have no value, those ideas need to be commercially viable in order to be successful. Most of new ideas are not commercially viable at the beginning, entrepreneurs need to put in place processes to search for a profitable business from the very initial stages (Blank & Dorf, 2012; Ries, 2013). According to Trimi and Berbegal-Mirabent (2012), one of the main reasons for start-ups failure is their lack of processes to do so. Also, they are characterized by a chaotic and informal structure way of working (Wright & Drori, 2018). -112- Intangible Capital – https://doi.org/10.3926/ic.1669 Business accelerators foster an innovation culture where startups understand the importance to work towards the commercial viability of their innovations since the very beginning. Accelerators encourage startups to adopt specific management methodologies that help startups manage their contingencies and successfully develop their innovative products and services through strategic oriented processes (Barrehag et al., 2012; Trimi & Berbegal- Mirabent, 2012). Alike traditional ways, these methods apply an iterative approach and a trial-and-error philosophy for validating business models, the appropriateness of specific products or services to market or for providing frugal working routines to transform innovations into scalable solutions (Gonthier & Chirita, 2019; Trimi & Berbegal-Mirabent, 2012). Most of business accelerators partner with stakeholders to offer deals to their portfolio companies. These deals are established with many companies at the forefront of technology which supports startups’ development process through different means such as free services or special access. These deals facilitate the technological requirements and obstacles constraints of startups’ when creating new products or processes faster than outside of business accelerators would do. Innovation capability also requires an openness and collaboration culture (Skarzynski & Gibson, 2008) where the willingness to take risks and to exchange ideas are promoted (Wan, Ong & Lee, 2005). The supportive peer-to- peer, entrepreneurial working environment (Cohen, Fehder, Hochberg & Murray, 2019; Cohen & Hochberg, 2014) in which startups are embedded during the acceleration program leverage startups’ innovation capability. In fact, as Y Combinator highlights in its web, they fund startups in batches because it works better for everyone. “It’s more efficient for us, but also better for the startups, who probably end up helping one another at least as much as we help them” (Y Combinator, 2020). Business accelerators provide a working space to their startups to work alongside other entrepreneurs instead of in isolation and establish communication mechanisms for them to access their business accelerator networks (Polo García-Ochoa, 2020), which reflects in startups’ innovation capability (Konsti-Laakso, Pihkala & Kraus, 2012). By offering processes that help startups to adopt and internalize working and innovative thinking habits, a working space to progress together and mechanisms to exchange information, business accelerators are fostering the underpinning activities that enable the enhancement of startups’ innovation capability. We therefore suggest: H4: Accelerator influences the relationship between startup’s innovation capability and its performance 3. Method 3.1. Sample and data collection We conducted an empirical study with Spanish business accelerators as the primary research subjects. The selection of Spain as a country base is relevant given the acknowledgement of this country as one of the biggest startups’ hubs on Europe (Mobile World Congress, 2019; Atomico, 2019). The lack of an official database of Spanish business accelerators, led us to use a reputable complementary source to frame our sample namely “El Referente” (Guía de Inversión para Startups, 2018-2019). To select the business accelerators that would be included in our study was a complicated exercise due to the variety of entities calling themselves business accelerators without gathering their unique features. So we restricted our sample to Spanish business accelerators which fulfill the following characteristic: A fixed-term, cohort-based program, including mentorship and educational components, that culminates in a public pitch event or demo day (Cohen, 2013; Cohen & Hochberg 2014). So, the study population was 29 and our sample was 24 (82.75% of the whole population of business accelerators). Data were collected from July 2019 to January 2020 by direct questionnaires which included 19 questions on the dynamic capabilities of sensing the market, absorption, integration, and innovation. 3.2. Selection of set of dynamic capabilities indicators The lack of prior research into the themes connected to dynamic capabilities and accelerators motivated the authors to use a Delphi approach as an appropriate way to obtain information (Varela-Ruiz & Díaz-Bravo, 2012). -113- Intangible Capital – https://doi.org/10.3926/ic.1669 This qualitative, consensus and participatory methodology is described by Torrado-Fonseca and Reguant-Álvarez (2016) amongst others, and applied in social sciences studies (Dana & Wright, 2008; Gartner, 1990; Martínez García, Padilla Carmona & Suárez Ortega, 2019; Pandza & Holt, 2007). The Delphi process was conducted from January 2019 to March 2019 and enrolled the experience of startup founders, managers or professionals related to startups or businesses accelerators. They helped us to build a list of specific routines embedded in business acceleration programs which might impact the development of the dynamic capabilities of sensing the market, absorption, integration, and innovation in their startup’s portfolio. In the first step, relevant practices linked to each dynamic capability were identified and selected. Firstly, a preselection of business accelerators practices was conducted according to their relevance to favor dynamic capability development. The pre-selection was based on an extensive literature review from Hallen et al., (2019), Teece (2007), Pavlou and El Sawy (2011) and Barrehag et al. (2012) amongst others. Finally, 29 items were preselected representing the different accelerator’s routines divided into 4 sections, each focusing on a dynamic capability. Also, an open-ended question was included to add further comments as necessary at the end of each section. Subsequently, the selection process consists of experts’ judgments by means of successive iterations of questionnaire, to show convergence of opinions and to identify dissent or non-convergence. By conducting telephone, mail or face to face interviews with 16 experts, each pre-selected item was analysed and addressed according to its relevance in startups’ dynamic capabilities generation in a business accelerator context. A second round was sent with descriptive information from the previous set of responses to each expert to reconsidering their judgment and also, newly questions provided by them in the prior round to be assessed. The selection of the final items to be included started after having assured the adequacy and completeness of the list of preselected items and the newly suggested. This way, experts assessed each routine by a Likert scale from one to five values, where one was the least important and five the most important. To select them, two reference statistics were taken to: the mean, which should be greater than 3.5 and the median which should be greater than 3. This ensures that all the items were considered important for all experts and for the whole sample. Then, from the items whose values met the previous criteria, we selected those items in which there was consensus. Consensus was achieved by having at least 75 % of participants’ votes fall within 4 and 5 values or when this does not happen, the standard deviation has to be equal or less than 0.90. Finally, from a list of 29 initial variables and 12 newly suggested variables generated in the first round, the 16 participants reached consensus on 19 different items developed by accelerators which help in the generation of startups’ dynamic capabilities. 3.3. Statistical analysis Four set of variables were defined: those related to sense the market capability (Si), those related to absorption capability (Ai), those related to integration capability (INTi) and those related to innovation capability (INNi), as shown in Table 1. Also, the values obtained in the descriptive analysis for each variable are included. Canonical discriminant analysis was applied to analyse the relationships amongst the three four groups of variables. All statistical analyses were performed by using the software SPSS for Windows. 4. Results The Table 2 shows the general results of the canonical discriminant analysis with all the model measured: model sense the market capability (Si), model absorption capability (Ai), model integration capability (INTi), model innovation capability (INNi) and group model (Si+Ai+INTi+INNi). The aim of the analysis is to determine whether the variables used in each model will discriminate between those accelerators which get more than 50% startups financed (group 2) and those which do not (group 1). In three of the five cases, discrimination among groups was relevant because the Wilks’ lambda was always significant for the discriminant variables. The models (Si) and (Ai) and (Si+Ai+INTi+INNi) classify 79.2, 95.8% and 87.5% of cases correctly. Also, it can be observed that the discriminant functions are also sufficiently significant, with values of p<0.05 in all of the cases. The three models show discriminant capability. As showed, the other two models (INTi) and (INNi) do not show discriminant capability (p>0.05). -114- Intangible Capital – https://doi.org/10.3926/ic.1669 Model (n) Eigen value Can. Corr Wilks' lambda Chi-square gl p Correct Sensing the market variables (Si)0.997 0.707 0.501 13.491 5 0.019 79.2 Absorption variables (Ai)1.828 0.804 0.354 19.229 7 0.008 95.8 Integration variables (INTi)0.131 0.340 0.884 2.523 3 0.471 66.7 Innovation variables (INNi)0.29 0.121 0.972 0.611 1 0.434 70.8 All mean variables (Si+Ai+INTi+INNi)0.954 0.699 0.512 13.398 4 0.009 87.5 Table 1. Results of canonical discriminant analyses Also, standardized canonical coefficients (SCC) and the structure matrix were examinedto determine which variables contributed more to the group differences. Table 3 summarizes this information for the discriminant function estimated. The SCC provides an index of the importance of each predictor. Coefficients with large absolute values correspond to variables with greater discriminating ability. In model (Si), “Teach entrepreneurs about the identification and monitoring of metrics and KPIs” (S4) score was the strongest predictor while (S2), “Inculcate entrepreneurs the importance of gaining real knowledge of their target market / customers” (note –sign) was next in importance as a predictor. In the case of model (Ai), “Entrepreneurs have individual sessions with mentors in their program.” (A6) score (note – sign) was the strongest predictor followed by “Review the results and metrics with each entrepreneur to help them interpret and make decisions” (A7) as the next variable in importance. Finally, in model (Si+Ai+INTi+INNi), “Sensing the market capability.” (Si) score (note – sign) was the strongest predictor while (INTi), “Integration capability” (note – sign) and (ABi), “Absorption capability” were the next variables in importance. These variables with large coefficients stand out in each model as those that strongly predict allocation to more than 50% alumni financed or not (our indicator of accelerator performance). The rest of the variables were less successful as predictors. Although the variables named above are those that contribute the most to discriminate, the interpretation of each one is different. The signs of standardized canonical coefficients are used to characterize the function. It indicates the direction of the relationship but, in order to interpret the direction, we need to understand where the group centroid lies (Table 6). Cases with scores near to a centroid are predicted as belonging to the class that defines that centroid. Examining the group centroids for the three models(Table 6), centroids for group 1 (less than 50% startups financed) has always positive means while the ones for group 2 (more than 50% startups financed) produces always negative ones. This implies that in model (Si), group 1 was defined by the variables S1, S3, S4 y S5 while group 2 was defined by the variable S2; in model (Ai), group 1 was defined by the variables A1, A3, A5 y A7 and group 2 by A2, A4 and A6, and in model (Si+Ai+INTi+INNi) group 1 was defined by the variables Si, and group 2 by Ai, INTi, INNi. So, in the case of the routines such us (S2), “Inculcate entrepreneurs the importance of gaining real knowledge of their target market / customers” in model (Si), the routines “Entrepreneurs have individual sessions with mentors in their program.” (A6) and, “Facilitate the contact of the entrepreneurs with potential clients and / or specific communities” (A4) in model (Ai) and those routines related to integration (INTi) and absorption capabilities (Ai) in model (Si+Ai+INTi+INNi), if the accelerator performs these routines with a higher frequency than the average, the accelerator will be classified in group 2. -115- Intangible Capital – https://doi.org/10.3926/ic.1669 Jones, O. Macpherso, A. Jayawarna, D. (2014). Learning to Grow: Dynamic Capabilities in New Technology-based Firms. Paper Presented at the British Academy of Management (BAM) Conference, Aston University, Birmingham, 44(1), 1-5. https://doi.org/10.1007/s13398-014-0173-7.2 Jones, O., Macpherson, A., & Jayawarna, D. 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Journal of World Business, 48(4), 539-548. https://doi.org/10.1016/j.jwb.2012.09.009 Intangible Capital, 2020 (www.intangiblecapital.org) Article's contents are provided on an Attribution-Non Commercial 4.0 Creative commons International License. Readers are allowed to copy, distribute and communicate article's contents, provided the author's and Intangible Capital's names are included. It must not be used for commercial purposes. To see the complete license contents, please visit https://creativecommons.org/licenses/by-nc/4.0/. -125-