Incubating innovation: the role of incubators in supporting business model innovation

Abstract

Purpose

The role of incubators in promoting startup growth has received close research attention, but the findings paint a conflicting picture. This study aims to reduce the ambiguity surrounding incubator impact by exploring how incubators can support startups with business model innovations – a significant growth factor for startups neglected in the incubation literature.

Design/methodology/approach

Using a multiple-case study design, the authors conducted semistructured interviews with incubator directors and startup founders, offering insights into their experiences. The transcripts were coded following the Gioia method.

Findings

This study shows that incubatees are exposed to and struggle with business model innovation. Therefore, this study explores how incubators can support startups in innovating their business models.

Research limitations/implications

This research reveals the importance of addressing the psychological needs of entrepreneurs in incubators. By offering emotional support, incubators can create a positive psychological environment, helping entrepreneurs face fears and challenges. This highlights the human side of entrepreneurship, which has not been considered in the incubation literature.

Practical implications

Incubator directors can strengthen their programmes’ impact by offering tailored support for business model innovation and facilitating network connections. Policymakers should encourage ecosystem collaboration and allocate resources to effective programmes.

Originality/value

This research fills a gap in the incubation literature by emphasizing the significance and need for support for business model innovation. This study also offers original insights into the psychological dimensions of entrepreneurship.

Citation

Braun, S. and Suoranta, M. (2024), "Incubating innovation: the role of incubators in supporting business model innovation", Journal of Research in Marketing and Entrepreneurship, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JRME-01-2024-0028

Introduction

Due to the substantial support and financial backing they receive from governments, municipal agencies and universities, incubators are expected to benefit society (Bergek and Norrman, 2008). They provide entrepreneurs with the resources, mentorship and support they need to develop and realize their business ideas. However, despite the increasing prevalence of incubators, their impact on entrepreneurs, startups and local communities remains unclear (Bergman and McMullen, 2022). While some studies suggest that incubators improve startup performance (Hackett and Dilts, 2004a; Lukes et al., 2018), others question their effectiveness (Pena, 2004; Schwartz, 2013; Schwartz and Hornych, 2008). This inconsistency warrants exploration.

The conflicting findings about incubator effectiveness highlight the need for more research to understand the conditions under which incubator impact is substantial. One potential mechanism to strengthen incubator impact is support for business model innovation (BMI). BMIs are strategic changes to how a company creates, delivers and captures value (Björkdahl and Holmé, 2013). They are particularly relevant for startups, which often lack explicit business models at launch. Instead, startups iterate and refine their approach over time (Ries, 2011). Consequently, BMI can be a significant growth driver for emerging startups (Zhang et al., 2023). Given the potential benefits of BMI for startups, we investigate their support within incubators.

Our article contributes to the current literature on startup support mechanisms by examining BMI support. Studying BMI allows us to better understand how incubators affect startups and justify their societal value while underscoring the importance of a collaborative culture within the entrepreneurial ecosystem. Ultimately, these insights can lead to more viable and sustainable startups, driving economic growth, creating jobs and improving the quality of life for individuals and communities.

We posit that incubators are well suited to facilitate BMI because they can access industry expertise, networks and resources (Grimaldi and Grandi, 2005; Hackett and Dilts, 2004a). These assets should be helpful, as they can assist startups in bridging knowledge gaps, seizing market opportunities and adapting to changes. However, BMI support has yet to be considered in the incubation literature. By exploring the role of incubators in promoting BMI and their impact on startups, we aim to reduce the ambiguity surrounding incubator impact. We address how BMI relates to entrepreneurial marketing and the influence of the entrepreneurial ecosystem on the marketing strategies that startups use. These two areas are considered to be of high research interest (Nasser and Can, 2022). We address the following research questions:

RQ1.

How do incubated startups benefit from BMI support?

RQ2.

How can incubators best support startups with BMI?

The study offers implications for key stakeholders in the entrepreneurial ecosystem, including policymakers and incubator directors. Policymakers stand to benefit by gaining insights into more effective incubation programmes, improving resource allocation and strengthening incubator impact. By understanding the role of BMI and the support needs of startups, incubator directors can improve programme design. This involves empowering entrepreneurs to make changes, navigate challenges and innovate business models to seize growth opportunities and counteract constraints. Consequently, entrepreneurs will receive better-tailored support to promote their startups’ growth.

Literature review

Incubators

Incubators are support organizations that offer startups shared office space in a supportive environment conducive to growth (Allen and McCluskey, 1991). They provide various resources and services, such as monitoring and business assistance, to help startups succeed while minimizing the risk of failure (Hackett and Dilts, 2004a). Incubators often operate as parts of broader entrepreneurial ecosystems (Spigel, 2015), where they act as intermediaries, facilitating interactions and connections among the various actors within the entrepreneurial ecosystem (Woolley and MacGregor, 2022). The ultimate aim is to create financially viable, freestanding companies within the incubation period (Aernoudt, 2004).

There are different types of incubators, such as business innovation centres, corporate private incubators, independent private incubators and university business incubators (Grimaldi and Grandi, 2005). Incubators’ objectives differ on the basis of their type. For example, university incubators foster faculty–industry partnerships, for-profit incubators prioritize investment prospects and nonprofit incubators are geared towards job generation (Allen and McCluskey, 1991). However, incubators of all types share the goal of helping startups thrive and expand.

The current literature identifies three main factors that affect incubator impact: the incubator’s resources, specialization and startup selection. Resources are central because resource provisioning is one of incubators’ key roles. By providing resources directly or indirectly through informal and formal networking, incubators can help satisfy start-ups’ resource needs (Albort-Morant and Oghazi, 2016; Peters et al., 2004). These resources are usually available to all incubatees for free or at reduced cost, which is more efficient than each startup procuring them independently (van Weele et al., 2020). Larger incubators can offer broader sets and higher quantities of resources, equipping ventures with better infrastructure and more comprehensive business support (Klingbeil and Semrau, 2017). They are also often better connected, increasing the availability of potential partners that could lead to collaboration (Klingbeil and Semrau, 2017; Schwartz and Hornych, 2008).

Incubator specialization – focusing on specific industries, such as biotechnology or medical engineering (Schwartz and Hornych, 2008) – increases their effectiveness because services can be customized to the needs of incubatees (Mas-Verdu et al., 2015). Higher-quality equipment and premises, better mentorship and services and beneficial image effects enabled by specialization are essential when innovation projects and startups have increased in complexity (Schwartz and Hornych, 2008). Thus, specialization is a critical factor in incubator effectiveness, enabling support and resources tailored to the needs of incubatees.

Startup selection is the third critical factor in incubator effectiveness. Incubator effectiveness is often measured by the success of the graduating firms. This implies that startup selection can impact incubator effectiveness in two ways. First, effectiveness can be improved by selecting startups with greater potential. Choosing high-potential startups can be equated to “picking the winners” (Bergek and Norrman, 2008). With this strategy, incubators identify and select startups with high potential for success through rigorous screening to find the most promising ideas. Picking the winners results in selecting only the strongest startups, creating a portfolio with strong growth potential. Second, the success of graduating firms can be affected by choosing startups that align with the incubator’s strategy. Strategic alignment between the incubator and incubatee during the selection process is crucial for effective incubation, as it reduces the costs and magnitude of failure for incubatees while increasing their chances of success (Hackett and Dilts, 2004b; Hausberg and Korreck, 2020; Wiggins and Gibson, 2003). Consequently, ensuring fit between the incubator and incubatee during the selection process is essential for effective incubation (Wiggins and Gibson, 2003).

In summary, incubators are vital support systems for startups, offering space, resources and connections. Their effectiveness has been attributed primarily to available resources, specialization and startup selection. However, incubator support mechanisms – i.e. what incubators specifically do and how they affect incubatee performance – have not received much attention with respect to their effectiveness.

Business model innovation

We now turn to a previously understudied component of the incubation process: supporting BMI. BMI refers to changes in how value is created, delivered and ultimately captured (Björkdahl and Holmé, 2013) – referring to innovating the firm’s business model rather than the offering (Baden-Fuller and Haefliger, 2013). BMI is conceptualized as a holistic type of organizational innovation (Foss and Saebi, 2017) crucial for a firm’s long-term prosperity (Bucherer et al., 2012). It has become increasingly common as technological advancements, deregulation and evolving customer preferences have made more business model configurations possible (Casadesus-Masanell and Zhu, 2013). In sum, BMI is an essential type of organizational innovation.

Startups embrace BMI for several reasons: growth, competitive advantage and resilience. BMI is a growth enabler for startups (Zhang et al., 2023) that has ushered in remarkable business success for new ventures, even in intensely competitive environments (Casadesus-Masanell and Zhu, 2013). BMI can drive growth by improving a firm’s value proposition and delivery of offerings (Keiningham et al., 2020). Innovating the business model can unlock growth potential by expanding the boundaries of a firm’s architecture and enabling new expansion paths (Teece, 2010). These findings underscore the role of BMI in promoting startup growth.

BMI can create competitive advantages by enabling startups to capitalize on neglected value sources within the firm or build new systems that are hard to copy (Amit and Zott, 2012). Value sources include markets not yet addressed by competition or the identification of new market niches (Foss and Saebi, 2017; Latifi et al., 2021). Hilti is a prominent example of BMI that led to a competitive advantage. Facing intense competition in the power tools market, Hilti innovated its business model by providing fleet management services (Björkdahl and Holmé, 2013). This differentiated Hilti from competitors and added customer value, improving its competitive position. Thus, adapting and innovating business models can promote competitiveness (Abrahamsson et al., 2019).

Resilience increase as firms innovate their business models to capitalize on emerging opportunities (Eriksson et al., 2022). More robust business models can also better withstand economic downturns and other disturbances (Morris et al., 2005). Startups benefit from BMI because the business model can be the cause of failure, even when opportunities, resources, new ideas and skilled entrepreneurs are available (Morris et al., 2005). External changes, for example, can render an existing business model ineffective, necessitating the development of a new one.

In summary, BMI support can improve incubator performance and foster growth, competitive advantage and resilience. BMI is crucial for startups because their success often hinges on the effectiveness of their business model, which can evolve rapidly. Thus, given the prevalence of BMI and its impact on startups, it is crucial to explore how incubators can best support startups in this regard.

Data and methodology

Research design

We studied the effect of incubation on BMI through a multiple case study of incubators and their participants, aiming to understand BMI in a real-life startup environment. We included multiple cases to identify patterns and compare different cases (Eisenhardt and Graebner, 2007; Yin, 2018). The interviews were coded via the Gioia approach because of its suitability for capturing real-life experiences (Gehmann et al., 2018).

Sample

Our data come from interviews with incubator directors and founders. We interviewed five directors from Finland, two from Sweden and one from Spain. In addition, we interviewed startups from two Finnish incubator programmes and one Spanish programme. We selected cases via theoretical sampling to gain insights into the BMI process (Eisenhardt and Graebner, 2007). We focused on growth-oriented startups that had participated in an incubator programme for at least six months to ensure sufficient exposure to its influence. This resulted in 19 interviews with startup founders, 16 based in Finland and three in Spain, lasting 40–60 min each. Tables 1 and 2 provide overviews of the incubators and startups.

Data collection

The interviews of both the incubator directors and start-up founders followed free reports, were conversational and flexible and allowed the participants to skip questions they could not accurately answer to increase the validity of the collected data (Miller et al., 1997). In the interviews, the startup founders were asked about their business overview, model, changes, incubation services, internationalization and growth plans. The incubator directors provided information about their programmes, including an overview, the selection process, services, observed changes and resources. Data collection continued until no new insights emerged, indicating theoretical saturation (Eisenhardt, 1989).

Data analysis

We used MAXQDA software to code, organize and analyse the data. The interviews were transcribed after each session and reviewed to ensure accuracy. We coded the data into first- and second-level codes, further clustering them into third-order themes. The resulting code structure is shown in Figure 1.

Results

Our data revealed multiple instances of BMI, as summarized in Table 3. Most of the BMI pertained to value delivery, particularly in changing customer segments, but some related to sales channel innovations. Value capture innovations centred on revenue streams. While less frequent, value creation was also innovated in the value proposition, key resources and key partners.

Changes in business environments, financial constraints and positioning are drivers of BMI. However, a lack of funding, recruitment challenges and personal fears are impediments. Entrepreneurs can foster BMI by being proactive and testing different business model configurations. Incubators can provide direct and indirect BMI support. Direct BMI support includes conducting regular business reviews with experienced coaches, providing external perspectives, validating business ideas, offering emotional support and hosting experts. Indirect support includes ties to research institutions, access to the incubator’s network, the facilitation of partnerships and financial assistance. Figure 2 presents the main findings on how incubators can support BMI and what drives startups to innovate their business models and hinders them in doing so. Next, we present the findings in detail.

Drivers of, challenges in and facilitators of business model innovation

We now examine the first two aggregate dimensions of the coding structure (strategic business evolution and navigating business model innovations) in detail. The startups innovated their business models in response to changes in the business environment and financial constraints and to pursue new positioning. Changes in the business environment drive innovation because these shifts can disrupt the market, challenge existing business models and prompt reevaluation of competitive strategies (director of Speed-Launch Lab). For example, IntelliReach, recognizing rapid advancements in AI technology, emphasized the importance of continuous learning and quick adaptation to capitalize on profitable market opportunities. The introduction of generative AI prompted the startup to explore and integrate new technologies into their services.

Financial constraints also drive BMI because they dictate possible business model options (director of Speed-Launch Lab). The business model must be innovated if the startup cannot secure funding or if actual cash flow significantly differs from projections. Therefore, startups must assess the chosen model’s feasibility and impact on cash flow, as the director of Speed-Launch Lab explained. For example, NutriSmart Cart faced early challenges because substantial funds were needed to develop and market a nutrition app for consumers, exceeding their budget and prompting them to reevaluate their business model. As a result, they shifted their focus to supermarkets, which targeted a new customer segment. This new business model required much less funding, as marketing to consumers was expensive, whereas acquiring supermarket clients was more cost-effective.

Positioning, which involves finding the right product–market fit, is also a significant driver of BMI (AutomateX, director of Speed-Launch Lab). Therefore, startups should understand how their product or service, design, sales and marketing strategies align with the market (director of Speed-Launch Lab). Focusing on the right customer segments enables startups to strategically direct marketing efforts and allocate resources to customers most likely to benefit from and pay for the product or service. This realization often prompts fundamental changes in pricing models and selling points. For example, AutomateX initially had a pricing model with a high fixed fee and a lower usage-based fee. However, when they shifted their focus to enterprise customers, they moved to transactional pricing. This allowed for a consistent base fee while creating more opportunities for upselling.

As the case startups innovated their business models, they encountered challenges in recruitment, funding and overcoming personal fears. Recruiting qualified candidates for product development and sales roles posed a significant challenge for CareCom Connect and IngredientXpert, leading to failed hiring attempts and layoffs. DataVision Solutions suffered from a scarcity of suitable sales and technical development candidates, and MemLearn struggled to find developers for its app. These recruitment challenges prevented the startups from implementing innovations in their business models.

Funding is another critical challenge. For example, MobileShine AutoCare disclosed that financial struggles had brought them to the brink of bankruptcy, hindering their ability to innovate. CarbonClear Construction faced similar problems, emphasizing the need for funding to sustain and advance their business model.

However, resources are not the only constraint on innovation; fear of failure also plays a role. This psychological factor is an obstacle to BMI. Achieving a balance between taking risks and attaining positive outcomes is crucial; it is a tightrope walk that entrepreneurs must navigate (CareCom Connect). This was captured well by an interview with the founder of TimeEase Laundry:

The main challenges that I faced were pretty much my own fears, you know, fearing that, like, it would not work out. (TimeEase Laundry)

Entrepreneurs can help facilitate BMI by embracing a leadership role, being proactive and testing different business models. Entrepreneurs are responsible for instigating change in their firms, making proactivity essential (DataVision Solutions). While acknowledging the daily operational demands, the founder of DataVision Solutions highlighted the value of periodic reminders from incubator staff on the importance of strategic reflection.

Testing and piloting business model rearrangements are also crucial for BMI (director of Speed-Launch Lab). Understanding and comprehensively testing the potential business model allows founders to identify flaws, challenges and opportunities before committing to it. CareCom Connect embodied this proactive stance, continuously testing different business model rearrangements, prototypes and pilots as an ongoing strategy.

Incubator business model innovation support

We now turn to the main topic, incubator BMI support, which can be direct or indirect, as shown in Table 4. Direct incubator support refers to assistance provided directly by the incubator, whereas indirect incubator support means that the incubator acts as an intermediary rather than a direct source of support.

Direct support.

By providing startups with a supportive environment and relevant resources for innovating their business models, incubators can be vital in facilitating BMI. They can support BMI through conducting regular business reviews, providing external perspectives, testing ideas, providing emotional support and hosting experts who guide startups. Regular business reviews with experienced coaches and mentors are critical in supporting startups with BMI by identifying current business model issues and obtaining new ideas. Thus, business reviews provide opportunities to discover potential BMIs. Regular reviews encourage startups to reflect on and assess their business models. For instance, Energy Diagnostics recounted that their coach’s thought-provoking questions prompted deeper thinking. Identifying potential problems with the startup’s business model and devising appropriate solutions are significant outcomes of these review meetings, where startups discuss their challenges and shortcomings. However, review sessions may prove ineffective if the coach or mentor is not well suited to the startup’s needs. Therefore, it is essential to consider the coach’s or mentor’s expertise in relation to the startup. The director of SpeedLaunch Lab emphasized the role of the incubator in spotting issues:

Our job is to find the, the misunderstanding and the problems in the business model. […] So we can support them, to realize that there’s something to be innovated. (director of Speed-Launch Lab)

We try to challenge them as much as possible about their habitat […]. We challenge them to work and experiment with the business model (director of Catalyst Horizon Incubator)

Regular review meetings can inspire new ideas. For example, during one review session, Phage Healthtech’s coach prompted them to realize that their software could collect valuable customer data. While their software focuses mainly on analysis, they recognized the potential value of collecting data for training AI systems and selling them to third parties. This insight led them to consider revising their terms and conditions to include clauses allowing for such use of data, unlocking growth potential through a new business model.

External perspectives provide another avenue for incubators to support BMI by introducing new ideas. For example, CarbonClear Construction highlighted the usefulness of seeking external perspectives in unfamiliar areas, such as HR and marketing, thus closing knowledge gaps. Obtaining other opinions on the business model can be crucial to gaining insights and identifying blind spots (MemLearn). Even experienced founders benefit from external perspectives by gaining clarity when the operational side of their business distracts them from strategic planning (Pawsitive Wellness). External perspectives were provided not only by the incubator but also by the broader network. For example, Catalyst Horizon Incubator invites diverse actors from the surrounding ecosystem, exposing startups to alternative support networks and resources:

You can get a lot of like, out of the box ideas, when you meet, like a variety of people at the same time. (AutomateX)

The validation of business ideas is another area where incubators can support startups with BMI, often uncovering the need for or inspiring such innovations. This is because startups often base their plans on assumptions, which are then tested. Validation with customers often provides startups with a reality check, testing the assumptions underlying their business model (director of Catalyst Horizon Incubator). The incubator can encourage startups to actively listen to customers and understand their needs, enabling informed decisions about potential BMI (director of FastTrack Ventures). For example, CareCom Connect initially assumed that their value proposition would appeal to the health care industry. However, customer validation revealed that private-sector home care providers were a more suitable target market:

Everybody, a lot of people think they have figured it out when they start like getting secure, they know that they need to learn, think that they’re pretty sure like, this is how it’s gonna work. And almost always, it’s the opposite. (Director of Startup Launchpad Academy)

Many startup companies are writing assumptions in their business plan. And the reality hits them when they start executing the plans. (Director of FastTrack Ventures)

Emotional support was considered an important aspect of BMI support by the case startups. Resiliency was essential as the founders navigated the uncertainties and setbacks inherent in BMI. Emotional support could provide a vital source of encouragement, motivation and resilience, enabling the entrepreneurs to persevere through the ups and downs of the innovation process. For example, having a coach dedicated to well-being or a work therapist could prevent the neglect of personal health, ensuring that the founders maintained a balanced lifestyle (AutomateX, Carecom Connect). Emotional support gave them hope and helped them realize the significance of holistic well-being beyond material success, including health, family life and personal goals (ImpactNexus). Creating a supportive community where entrepreneurs can motivate each other was another facet of emotional support (NutriSmart Cart). This communal atmosphere could significantly increase morale and offer the encouragement needed to persevere through difficult times:

Everybody’s going to tell you No. Everybody’s gonna tell you have a really horrible idea. You’re not gonna make it; it’s stupid. (TimeEase Laundry)

Hosting experts is another way that incubators can support startups with BMI, providing specialized knowledge and real-world examples to drive innovation. Specialized knowledge from experts offers founders new perspectives and guidance, addressing their knowledge gaps and facilitating more informed decision-making. Since no single person can know everything in depth, engaging experts is a valuable way for incubators to help startups recognize and achieve BMI (AutomateX, CarbonClear Construction). Experts can also provide real-world examples showing how they coped with challenges and attained success, helping startups understand strategies and adapt them to their own contexts (IngredientXpert, MemLearn). For example, FastTrack Ventures and MedInsight Launchpad Academy hosted regular expert presentations that helped startups identify areas for innovation and embrace change (director of FastTrack Ventures):

I would say that’s a very powerful way that we are bringing some experts, we’re bringing some, some successful entrepreneurs and they are giving their thoughts. (director of FastTrack Ventures)

Indirect support.

By fostering connections in the local entrepreneurial ecosystem, incubators can indirectly promote BMI. They can collaborate with research institutions, provide network access, facilitate partnerships and offer financial assistance.

Collaborations with research institutions offer entrepreneurs access to diverse programmes and facilities to innovate and test ideas (director of FastTrack Ventures). FastTrack Ventures’ partnerships with nearby universities and state-owned research institutions empowered startups to leverage cutting-edge technologies and knowledge. These partnerships could help them integrate innovative ideas and technologies into their business model. For example, WellSustain Solutions benefited from connections with students and faculty who provided new insights, such as a thesis worker, enriching the startup’s understanding of its target market.

The incubators’ networks also play a critical role in providing BMI assistance. Networks can provide new ideas (WellSustain Solutions) and opportunities to collaborate. For example, IngredientXpert leveraged FastTrack Venture’s connections to outsource its digital marketing to another startup with the incubator’s help. Similarly, MemLearn emphasized the lasting impact of networks, which had led to an ongoing mentorship that had persisted for over a year. The directors of Speed-Launch Lab and SprintVenture Labs echoed the sentiment, emphasizing the versatility of networks in supporting BMI:

We need our network, our ecosystem and that type of thing, to be able to offer our customers that type of service. (Director of SpeedLaunchLab)

By facilitating partnerships with external companies, fostering knowledge sharing and potentially cocreating new products or services, incubators can further support startups. For example, IngredientXpert expanded its ecosystem by partnering with a food-waste management company facilitated by an incubator. IntelliReach established a partnership model with ad-tech companies and data platforms operating under a shared revenue model.

Finally, financial support through investor connections is vital for BMI because it allows startups to invest in R&D and acquire needed resources. The incubator’s network can access a broader pool of potential investors, increasing the likelihood of securing funding (IntelliReach). By offering insights into investor requirements, available resources and necessary preparatory steps (WellSustain Solutions), incubators can aid startups in preparing for funding rounds. Consequently, by leveraging their connections, incubators can facilitate introductions and create opportunities for startups to pitch their ideas and secure funding, which can be instrumental in financing BMI.

Discussion

Incubators can help startups innovate their business models and benefit from BMI support. We found that this occurred through regular business reviews, emotional support, external perspectives, idea validation and expert hosting.

Our results suggest that incubator support mechanisms should extend beyond business assistance. Typically, incubator programmes are associated with more tangible forms of support, such as financial and business assistance (Albort-Morant and Oghazi, 2016; Hackett and Dilts, 2004a). However, our research reveals that incubators should also offer psychological shelter, providing emotional support to foster entrepreneurs’ resilience and help them navigate times when current assumptions fail, and innovations to business models are needed. This finding underscores the importance of incubators addressing the human side of entrepreneurship. By offering guidance and support to entrepreneurs facing fears and challenges, incubators can create a supportive psychological environment.

Our findings support previous studies that indicate the importance of incubators within entrepreneurial ecosystems (Klofsten et al., 2020; Peters et al., 2004; Woolley and MacGregor, 2022). The cases show incubators’ value in facilitating knowledge exchange and establishing connections, adding weight to the literature highlighting incubators’ intermediary function and influence in the entrepreneurial ecosystem. In addition, our study echoes Fernandes and Ferreira (2022) assertion about the importance of diverse stakeholders within the entrepreneurial ecosystem. Specifically, we demonstrate the impact of exposing entrepreneurs to diverse perspectives, which fuels creativity and innovation.

The main limitation of our study is the sample size. All the incubators included in the study are public. Therefore, the findings may be less applicable to other types of incubators, particularly corporate incubators, which operate differently from public incubators. In addition, most of the case startups are from Finland, and just a few are from central Spain. The sample’s lack of diversity may affect the generalizability of the findings to other contexts. Furthermore, all the data are from self-reports. The self-report method may have introduced bias or incomplete information, as participants might have been inclined to present themselves in a more favourable light, potentially compromising the accuracy of the data.

Several research avenues have emerged to advance the understanding of BMI support in incubators and its impact on startups. First, exploring the correlation between the BMI support provided by incubators and startup performance is crucial. A study on this topic could compare startups with and without BMI support, focusing on metrics such as revenue growth, market share and survival rates, to assess the effectiveness of such interventions in the short and long terms. Second, the potential spillover effects of BMI support should be investigated. Research should explore whether startups that receive BMI support are more likely to undertake independent BMI activities later, potentially fostering an innovation culture that enhances long-term adaptability and success. Third, the role of emotional support in startups deserves more attention. Future studies should analyse how incubators can provide effective emotional support and its benefits for entrepreneurial resilience. These include the types of emotional challenges entrepreneurs face and the strategies incubators can use to build resilience and persistence.

Our findings have practical implications for incubator directors and policymakers. This study provides incubator directors with directions to optimize their programmes. Policymakers can leverage the findings to make strategic decisions about resource allocation. They should encourage collaboration within the entrepreneurial ecosystem and promote partnerships among incubators, research institutions and established companies. By fostering a collaborative culture, policymakers can improve the overall effectiveness of the entrepreneurial ecosystem in which incubators operate. For startups, this study highlights the importance of paying attention to the drivers of BMI. Regular business reviews are crucial in helping startups identify potential issues and innovate accordingly. This is consistent with the recommendation by Eriksson et al. (2022) that firms reassess their business model when facing changes in present or future markets to maintain viability.

Conclusion

Startups can benefit from BMI support within incubators. Incubators offer a structured environment, expertise and network access, empowering startups to recognize and implement BMI. Our results also underscore the role of network connections in shaping startups’ strategies. Therefore, incubators act as intermediaries, facilitating knowledge exchange and creating opportunities for collaboration. Overall, incubator BMI support can pave the way for startup success and adaptability.

Figures

Figure 1.

Code structure

Figure 2.

Business model innovation support

Table 1.

Overview of the incubators and their directors

Programme	Position (since)	Programme budget	Location	Programme’s aim	Target group
Catalyst Horizon Incubator	Business Development Manager (8 years)	€350k	Southern Sweden	Stimulate entrepreneurship among students	Early-stage startups
InnovateLab Studios	Deputy Director (1 year)	€0.15m	Southern Sweden	Social impact	Students, teachers, researchers
SprintVenture Labs	Head (20 years)	€1m	Southern Finland	Improve the entrepreneurial mindset	Business, art and design, engineering
StartPulse Incubator	Deputy Head (1 year)	€2m	Southern Finland	Scale and grow startups	Industry-specific per campus
TurboBoost Ventures	CEO (2 years)	€0.25m	Southern Finland	Validate business ideas	Growth-oriented startups
Speed-Launch Lab	CEO, Founder (13 years)	€1m	Southern Finland	Internationalize startups	Startups of any stage
Startup Launchpad Academy	Director (2 years)	N/A	Central Spain	Validate business ideas	Early-stage student startups
FastTrack Ventures	CEO (5 years)	€1.5m	Central Finland	Accelerate startup growth	Local, growth-oriented startups

Source: Authors’ own work

Table 2.

Overview of the incubated startups

Startup	Founding/ Incubator cohort	Pre/post incubation sales (€)	Employees Pre/Post Incubation	Business model	Incubator
AutomateX	2018/2019	0/500.000	2/7–8	Software: Develops a multichannel platform for enterprise customer engagement, focusing on mobile devices	FastTrack Ventures
CarbonClear Construction	2019/2022	0/0	3/7	Mechanical woods: Produces sustainable construction materials	FastTrack Ventures
CareCom Connect	2017/2020	40.000/200.000	3/3	Health care: Offers a messenger app for families and caregivers in elder care	FastTrack Ventures
Data Vision Solutions	2014/2021	160.000/300.000	4–5/7	SaaS: Provides analytics and data processing tools	FastTrack Ventures
EcoPowerTech	2022/-	0/0	2/2	Energy: Sells electricity consumption solutions	Speed-Launch Lab
EcoRevolt Mobility	2021/2021	0/300.000	2/7	E-commerce: Offers refurbished electric scooters and e-bikes	Startup Launchpad Academy
Energy Diagnostics	2019/2021	70.000/130.000	1/2	Energy: Provides AI-based reporting for remotely readable electricity metres	Speed-Launch Lab
Impact Nexus	2018/2019	100.000/100.000	3/9	Business development: A collective of professionals contributing diverse skills to projects for the common good	FastTrack Ventures
IngredientXpert	2019/2022	100.000/200.000	4/7	SaaS: Offers a specialized product database for professional kitchens	FastTrack Ventures
IntelliReach	2022/2022	0/150.000	4/5	Publishing: Provides contextual targeting solutions for publishers	FastTrack Ventures
MedInsight	2022/2023	1.000/7.000	2/2	Health care: Develops a platform for extracting insights from medical communications	Speed-Launch Lab
MemLearn	2021/2022	0/0	2/2	Education: Revolutionizes Chinese character learning offered in a mobile app	Speed-Launch Lab
MobileShine AutoCare	2022/2023	50.000/100.000	1/3	Automotive: Provides on-demand car wash services at the customer’s location	Speed-Launch Lab
NutriSmart Cart	2021/2022	0/0	0/0	Retail: Offers personalized nutritional recommendations on supermarket and e-commerce platforms	Startup Launchpad Academy
Pawsitive Wellness	2021/2020	0/0	–	Pet supplements: Hemp-derived CBD products for pet wellness	Startup Launchpad Academy
Phage HealthTech	2022/2023	0/0	2/4	Deep-Tech: Licenses factor phages for experimental therapies	FastTrack Ventures
TimeEase Laundry	2020/2023	1.000/5.000	2/1	Hospitality: Streamlines B2B laundry services, mainly for restaurants	Speed-Launch Lab
UrbanQuest Adventures	2020/2023	100.000/200.000	1/1	Tourism: An immersive city exploration guide	FastTrack Ventures
WellSustain Solutions	2020/2022	40.000/130.000	3/3	Leadership development: Offers sustainable work well-being solutions through a mobile app for employee assessment and management	FastTrack Ventures

Note:

– = data not available

Source: Authors’ own work

Table 3.

Innovated business model components by startup

	Business model components
	Value creation	Value delivery	Value capture
AutomateX		Transitioned from in-person to digital sales channels, enabling cost-effective international expansion	Moved from fixed to transactional pricing, tailoring models to appeal to enterprises
CarbonClear Construction		No business model innovations
CareCom Connect	Formed a strategic alliance with a software development company for product development, addressing human and financial resource constraints	Shifted customers from eldercare consumers (B2C) to municipalities for childcare (B2G)
Data Vision Solutions		Considering a shift from travel to e-commerce platforms
EcoPowerTech			Switched from one-time fees to subscription options
EcoRevolt Mobility		Shifted from refurbishing scooter fleets (B2B) to selling used scooters (B2C)
Energy Diagnostics		No business model innovations
Impact Nexus		No business model innovations
IngredientXpert		No business model innovations
IntelliReach			Partnered with resellers to handle sales Implemented new pricing models for smaller publishers
MedInsight	Shifted from a social listening solution to a versatile tool also processing text data
MemLearn	Applied language learning methods to other domains, such as biology	In addition to Chinese learners (B2C), also targets B2B customers
MobileShine AutoCare		Transitioned from offering car washes to consumers to servicing company fleets	Planning a subscription model for business customers
NutriSmart Cart		Transitioned from a nutrition app for consumers (B2C) to serving supermarkets (B2B)	Moved from variable to fixed pricing models
Pawsitive Wellness		Shifted customers from pet owners and pet stores to veterinarians
Phage HealthTech	Considering changing terms and conditions to utilize big data for AI training	Contemplating shifting from direct treatment to a research database	Exploring licensing agreements
TimeEase Laundry			Changed pricing model by separating charges and introducing custom packages
UrbanQuest Adventures		Considering selling to employers (B2C) for their employees instead of directly to consumers
WellSustain Solutions	Transitioned from on-demand coaching to a software-as-a-service model Started collaborations with external app developers	New sales model	Transitioned from selling expensive large cases to offering low-cost pilot programmes

Source: Authors’ own work

Table 4.

Direct incubator business model innovation support

	Direct support						Indirect support
	Regular reviews	External perspectives	Validation	Emotional support	Hosting experts	Example	Research institutions	Incubator networks	Facilitating partnerships	Financial	Example
AutomateX		✓	✓	✓	✓	Looking after one’s well-being is important but easily overlooked. A coach dedicated to well-being can prevent neglect in this area		✓		✓	Connections to potential investors would be helpful
CarbonClear Construction	✓	✓			✓	Outside expertise offers new perspectives and fills knowledge gaps		✓			The incubator networks provide industry insights and contacts
CareCom Connect	✓		✓	✓		They initially assumed their value proposition would appeal to the health care industry, but validation led them to serve private sector home care providers		✓		✓	Contacting investors takes significant work. Matches made by the incubator with their investor contacts are beneficial
Data Vision Solutions	✓	✓				Regular business reviews are crucial to identify potential issues		✓			Benefits off meeting and talking to people
EcoPowerTech	✓					Reviews provide new ideas, such as developing an application for their heating automation service		✓			Networks are the incubator’s greatest asset. They found new customers and have more prospects through the incubator
EcoRevolt Mobility				✓		It is important to ensure that people feel comfortable and enjoy their work while performing at a high level	✓	✓			Ties to local universities facilitate access to qualified hires, such as master’s students as interns
Energy Diagnostics	✓					The coach’s thought-provoking questions prompted deeper thinking		✓	✓	✓	Incubator facilitated funding
Impact Nexus		✓		✓		Emotional support helps recognize the importance of holistic well-being beyond material success
IngredientXpert	✓				✓	Real-world examples showing how similar things have been done in other startups are valuable		✓	✓	✓	Networks facilitate discussions about challenges, plans, and lessons learned
IntelliReach		✓		✓		The entrepreneurial journey is isolating; discussing challenges with a professional helps		✓		✓	The incubator enabled venture capital funding
MedInsight				✓	✓	Industry experts offer ideas on cutting through the noise and fostering significant changes, such as positioning		✓	✓	✓	Views it as a gap that no new partners were introduced to them
MemLearn		✓			✓	Seeing examples from other companies, particularly B2B revenue potential, has been beneficial		✓	✓	✓	New connections that hold potential for future revenue-generating partnerships
MobileShine AutoCare	✓			✓		The strategic guidance of coaches, who encouraged changes if things were not working, has been invaluable		✓		✓	Contacts with investors would be helpful because they do not know any
NutriSmart Cart	✓			✓		Initially, they considered incorporating logistics and delivery. After talking with their coach, they refrained		✓		✓	Access to supermarket customers (new segment) through the incubator’s network
Pawsitive Wellness		✓		✓		Even experienced founders can lose focus. An external perspective provides clarity		✓			Networks provide experienced individuals in relevant fields
Phage HealthTech	✓	✓			✓	A coach suggested collecting customer data for AI training, unlocking a new business model			✓		The incubator can recommend partners who offer solutions to various types of problems
TimeEase Laundry				✓		Emotional support boosts confidence, which is beneficial in engaging with customers			✓	✓	Formed partnerships facilitated by the incubator to improve their offering
UrbanQuest Adventures	✓					Reviews can spark new ideas, such as changing the customer segment		✓			Networks provide trustworthy contacts
WellSustain Solutions	✓	✓				External perspectives helped them realize that the pricing strategy can be innovated to attract other customers	✓	✓	✓		Access to students and faculty who can contribute fresh insights and support ongoing projects, such as thesis work with customers

Note:

Expanded table available at https://osf.io/bw5v2/?view_only=bcf614793d944fecae4ce59167edd029

Source: Authors’ own work