Campus Ecosystems: Introduction

1.3  Problem Statement

The basic problem addressed by this report has two aspects.  The first is to better understand how PPTC has generated its remarkable success record at incubating high-tech businesses, and the factors that enable that success.  The second half of the problem is to understand whether those factors, or their equivalents, can translated to the European arena.  The answers to these problems will then determine appropriate advice to HTC management.

Thus, the general set of questions which will guide the research efforts in this study are:

• What is the governance model of PPTC? 
• What is the finance model of PPTC?
• What factors identify the ventures PPTC supports?   
• What impact does PPTC incubation have on the ventures it supports?
• How does PPTC compare to European technology incubators?
• What conclusions and recommendations are most appropriate to present to HTC?

1.4  Scope, Design and Methodology

1.4.1  Scope

The scope of this project is specified as the in-depth analysis of one specific Silicon Valley incubator, PPTC, and benchmarking that incubator's performance against two key European incubators, Yes?, Delft and Incubator3Plus. 

1.4.2  Design

The basic design of this study is mixed-methods with both quantitative and qualitative study.  The study design is to investigate the current operational processes of PPTC and of the two European benchmark incubators, then do a compare-and-contrast analysis of PPTC.  In addition to PPTC itself, an investigation of the ecosystem in which PPTC operates will provide an understanding of which ecosystem elements are important to the success of PPTC, along with whether those elements can translate successfully to the European venue to replicate PPTC's success in that environment.

1.4.3  Methodology

This study is conducted via a series of interviews with key management members of three incubators, the PPTC and the two European incubators.  These questionnaires, conducted via phone or email, include both quantitative responses using Likert scales, and open-ended qualitative responses.  The study participants also include participants from some of the ventures sheltered by PPTC. Questionnaires used in the study differed between incubator and sponsored ventures; both questionnaires are provided in the Appendixes to this study.

The methods to be used in this research project consist of three key types of data collection:

• Semi-structured interviews of current and former management of PPTC and of key personnel of benchmark organizations (i.e., Yes?, Delft and Incubator 3Plus);
• Mixed method (i.e., quantitative/qualitative) surveys of ventures which have participated (or are currently participating) in the PPTC incubator to gain their perspective on the incubator process;
• Case study method to evaluate PPTC's overall business characteristics.

In more detail these methods include:

• A series of semi-structured interviews of key PPTC personnel will be conducted to elicit more details about how PPTC operates, their experiences with the organization, and other relevant details.  These interviews and surveys will be semi-structured to ensure that participants have an opportunity to express their opinions and expertise about the technology incubator's operations.  Similar but briefer interviews will be conducted with key personnel of Yes?, Delft and Incubator3Plus.
• A series of mixed-method surveys of key personnel of several ventures which are either current members of the PPTC incubator or previously were members of the PPTC incubator process. It will be important to identify and include both ventures which failed as well as ventures which succeeded (or are on the path to success) in order to identify factors that contributed to success and failure of the ventures.
• Development of an in-depth case study of PPTC as a business to provide a basis for benchmarking PPTC against both Yes?, Delft and Incubator3Plus.

Data sources for this method come from two types of sources, primary information sources and secondary information sources.

Primary Information

1. Financial and company documentation directly available from PPTC.
2. Semi-structured interviews with key personnel at PPTC, and with key personnel at Yes?, Delft and Incubator3Plus.
3. Surveys of key personnel of ventures participating in the PPTC incubator process, including those currently in the incubator and those who have "graduated" from PPTC.
4. Interviews with the Silicon Valley Chamber of Commerce to retrieve basic information and statistics on success and failure rates of the technology incubator business, and on the success and failure rates of those businesses that get their start in such incubators.

Secondary Information

1. A review of California and U.S. business and environmental regulations to compare and contrast with European business conditions.  Note that businesses in the U.S. have a broad array of state-mandated regulations as well as federal regulation to comply with, so it will be important to consider both state and federal requirements to fully understand the business environment for PPTC.
2. Financial and business reviews and assessments of PPTC from respected sources: Moody's, Investors' Business Daily, Wall Street Journal, etc. as well as public filings such as those mandated by the U.S. Securities and Exchange Commission (SEC).
3. Literature review with special focus on areas of:

• Key success factors in incubator business models worldwide; this topic provides insight into technology incubation from the perspective of the incubator;
• Benefits accrued and other impacts on start-up businesses by participating in such incubator models; this topic provides insight into technology incubation from the perspective of ventures participating in the incubator.

These secondary data sources include journal articles, publications on incubation business models access from the Bradford & Tilburg Virtual Library. Other online resources such as web articles will provide a useful starting point from which the research will be conducted. 

The research results also act as a foundation to create a specific theoretical framework for this project.