Evaluating the Influence of Business Incubators to the Success of Business Incubatees:

A Case Study of Kickstart, Ideaspace, Impact Hub Manila and Launchgarage

Wildon S. Carpio Mary Shereen D. Guinto Shaira Marie S. Ibas Kirsten Mary Eleni S. Santiago
wildon_carpio@dlsu.edu.ph mary_shereen_guinto@dlsu.edu.ph shaira_ibas@dlsu.edu.ph kirsten_santiago@dlsu.edu.ph
De La Salle University
2401 Taft Avenue, Manila, Philippines

ABSTRACT
Business incubators are beginning to establish its presence in the Philippines. Although numerous studies about business
incubation have been conducted, there are no recent research about business incubators in the case of the Philippines. This study was
conducted to address the gap in the literature by providing an evaluation of how business incubators in the Philippines influence the
success of startup companies. The researchers utilized a framework where shared services, funding and support, networking,
mentoring and incubator governance are used as independent variables, while soft and hard measures of success are used as
dependent variables. In order to evaluate the performance of business incubators, the data gathered from the interview and survey
were analyzed using a cross-case analysis and multiple linear regression. The results of the cross-case analysis show that there is a
mismatch between the services that Ideaspace and Impact Hub Manila perceive to be the most important for their incubatees relative
to the actual needs of their incubatees. Moreover, the results show that majority of the incubators perceive networking, mentoring and
shared services as the most important factors in achieving the success of business incubatees. This is consistent with the results of the
regression analysis as these factors have a significant and positive influence to the soft and hard measures of success. To address the
issues found in the study, the researchers have come up with recommendations for the academe, business incubators and startups.

I. Introduction incubatees. To achieve these objectives, Triangulation, a method

In the Philippines, 99.58% of the businesses in the country are
composed of small medium enterprises (SMEs). However, Ms.
Minette Navarette, founder of Kickstart, mentioned that these
SMEs are most likely to fail by 96% (Moss, 2015). This
probability can discourage individuals to pursue and create their
own business. In order to increase the survival rate of startups,
one way is to acquire assistance from Business Incubators.
Business Incubators are organizations that provide business
incubation programs and services to startup companies and
entrepreneurs. Hence, these business incubators can contribute to
the success of startups in the long-run. choose to build connections, which influences the behavior of
Given the presence of business incubators and the emergence of
different startup companies in the Philippines, the researchers
found it relevant to evaluate how business incubators influence
the success of the different startup companies in the country. For
this study, the researchers focused on the business incubation
programs of Kickstart, Ideaspace Foundation, Impact Hub
Manila and Launchgarage. personal
The main objective of the study is to answer the general problem
of “How can the existing business incubators, namely Kickstart,
Ideaspace, Impact Hub Manila and Launchgarage, affect the
success factors of its incubatees?”. It aims to determine the
different key factors that contribute to the success of business
incubatees of the aforementioned business incubators. In
addition, this research also aims to evaluate and check if there is
an existing mismatch between the factors deemed important by
the incubators and the factors deemed important by the business
The researchers also identified how past literatures defined the
success of business incubation wherein the past studies used soft
and hard measures. Verma (2004) used job creation, financial
breakeven of incubatees, and number of successful graduates
they produced as a measure of the success of business
incubation. These are also considered as hard measures of
success which can be easily quantified. In addition, similar with
that employs both quantitative and qualitative analysis, was
utilized.
II. Review of Related Literature
There are three particular theories that were used as basis in the
study. These are the network theory, entrepreneurship theory and
resource advantage theory. Barnes (1954) shows the
relationships and connections of networks and social interaction
to incubators through the network theory. This theory is
commonly used by researchers as the theory claims that people
the entities involved within the “network”. Moreover, network
theory is useful in the study to explain the factors that facilitate
networking with a business incubator. On the other hand, Bull
and Willard (1993) introduced the entrepreneurship theory,
which explains that individuals are more likely to engage in
business under certain conditions such as task-related
motivation, supportive environment, expertise, expectation of
gain, and supportive environment. The
entrepreneurship theory is useful in this study since the
researchers are looking at instances of when and how incubators
would contribute to the rate of the success of startup companies
by encouraging entrepreneurial behavior. Lastly, Hunt (1995)
introduced the resource advantage theory which emphasizes the
importance of the availability of tangible and intangible
resources to the firm to have an efficient and effective business
operations. This theory is also useful for this study since it
determines how resources would help the company to gain a
competitive advantage in the market place.
Verma’s study, Benjamins (2009) used revenue, funds raised,
expression of interest, relative performance and distinctiveness
to measure success. Lastly, Hackett & Dilts (2004) also used
hard measures of success, specifically, survival and profitability.
Moreover, aside from the Hard measures of success, Benjamins
(2009) also showed that success can be measured through soft
measures of success and it is denoted by the business and
technical knowledge acquisition. From all of these studies, it was
seen that there is a similarity in measuring success of incubators
and measuring the success of incubatees. Although there is no
standard criteria to determine success, the review of related
studies above provided guidelines and information about the
different options that can be used to measure success.

The past literature studies were also used by the researchers to
determine the different factors that were considered in the study.
These factors are shared services, networking, funding and
support, mentoring, and incubator governance. Overall, the past
literatures showed that the five independent variables that had
been investigated have a significant and a positive impact to the
success of incubatees. Hence, the researchers assumed that these
factors will positively influence the success of businesses who
are under the care of a business incubation program.

In order to address the research gap in the existing literature, the
study provided empirical evidence of the impact of business
incubator to the success of startups in the case of Philippines.
The study focused on evaluating the programs of business
incubators using the perspective of business incubatees, in terms
of bridging the needs of incubatees with the different programs
and services provided by the incubators.

III. Framework

Conceptual Framework Figure 2: Operational Framework
The conceptual framework below shows the effect of Shared
Services, Funding and Support, Incubator Governance, which is measured through technical knowledge acquisition and
Networking and Mentoring to the success of the incubatees. In business knowledge acquisition; and (2) hard measures of
constructing the conceptual framework, the proponents adopted success, which is measured through the incubatees’ profitability,
and integrated the frameworks of Verma (2004), Benjamins sales growth, job creation, and overall performance. Thus,
(2009) and Hackett and Dilts (2004). Since the success of the Shared Services, Funding and Support, Mentoring, Incubator
incubatees can be measured in various ways, the researchers Governance and Networking are used as the independent
decided to measure the hard measures and soft measures of variables, while Soft Measures of Success and Hard Measures of
success separately. Soft measures are measured by the technical Success are used as the dependent variables. The five
and business knowledge acquired by the incubatees from the independent variables are hypothesized to have significant and
program, while hard measures are measured by profitability, positive effect on both the soft and hard measures of success.
sales growth, job creation and overall performance of the With the use of this framework, the researchers were able to
incubatees. provide recommendations that can help the incubators improve
business and technical knowledge acquisition of their business
incubatees, as well as increase the profitability, sales growth, job
creation and overall performance of the startups.

IV. Methodology

This study is a descriptive, explanatory and evaluative research.
The research design was divided into two parts: (1) a census on
the business incubatees (startups) of Kickstart, Ideaspace, Impact
Hub Manila and Launchgarage, and (2) interviews with the
incubator managers of the aforementioned business incubators.
From a total of 77 business incubatees, the proponents were able
to gather 35 responses. Through these methods, primary data and
information from both business incubators and the incubatees
Figure 1: Conceptual Framework were obtained which were utilized in the analysis of the study. In
addition, the researchers also used past literatures and journal
Operational Framework articles as secondary data to support the research.
Based on the conceptual framework, the researchers came up
with an operational framework as shown above. This operational Triangulation was used as the method of analysis since this
framework can be used to identify the factors or the business technique combines both qualitative and quantitative methods
incubation services that affect the (1) soft measures of success, (Cooper & Schindler, 2011). For qualitative analysis, the
proponents utilized a cross-case analysis to determine if there is
a gap between the incubator’s incubation program and the
business incubatees’ needs. Moreover, this method also shows
the similarities and differences in the responses of the incubator
managers (Ruckert-John, n.d.). On the other hand, for the
quantitative analysis, Ordinary Least-Squares (OLS) regression
was employed to model the effect of the independent variables
on the dependent variables. Moreover, this technique was
employed because according to Gujarati & Porter (2009), it is
“intuitively appealing and mathematically much simpler”. Aside
from these, descriptive analysis was also used to analyze the
statistical parameters (i.e. mean, standard deviation, minimum,
maximum, skewness and kurtosis) and provide analysis of the
data obtained from the study. positive effect at 5% level of significance. The model explains
V. Results and Discussion
Qualitative must be able to exert more effort in order to translate the
After comparing the responses of the incubatees with the
responses of their corresponding incubators using a cross-case
analysis, it was found that while there is a similar ranking
provided by Kickstart and Launchgarage and their respective
incubatees, there is an existing mismatch between the perception
of Ideaspace and Impact Hub Manila regarding the services that
should be prioritized relative to the actual needs of their
incubatees. This means that Ideaspace and Impact Hub Manila
are not providing much of the services that their business
incubatees need. In the case of Ideaspace, they perceive
Networking as the most important service for their incubatees.
However, their incubatees need Funding and Support the most.
On the other hand, Impact Hub Manila perceives Incubator
Governance to be the most important for their incubatees even if
their incubatees find Shared Services and Funding and Support
to be the most important for them (See Table 2 in Appendix). Hub Manila and Launchgarage should pay more attention to the
The proponents also analyzed the mean scores that each
incubator got per success factor as the scores indicate the
satisfaction that the incubatees receive from their respective
incubator. From the 5 factors, the incubators only received high
scores (scores above or equal to 4) for the following: Mentoring,
Networking and Incubator Governance. Moreover, all
incubators received the highest scores for Networking. This
means that the incubatees from the different incubators are
satisfied with the Networking services they receive.
Considering the measures of success, it was seen that all mean
scores for both soft and hard measures are below 4th level of the
Likert Scale (agree), which imply that business incubatees do
not see and perceive the services as contributing to their success.
However, an exception can be made for Ideaspace since it scored
3.969 in Soft measures of success, which is very close to 4 and
may be considered as successful already. For the soft measures
of success, Kickstart and Launchgarage scored 3.675 and 3.5143
respectively, while Impact Hub scored 2.8286. From this result,
it can be inferred that the incubatees of Kickstart and
Launchgarage are neutral while Impact Hub scored below 3,
which means that their services did not collectively translate into
success. On the other hand, in terms of measuring success with
hard measures, all incubators scored 3.0 to 3.7, which means that
all incubatees only feel neutral and do not necessarily agree that
the services translated into success when collectively analyzed.
Overall, the results show that business incubators should
improve their programs in order to translate their effort to the
soft and hard measures of success of their incubates (See Table 3
in Appendix).
Quantitative
Separate multiple regression analysis were done for the two
dependent variables, which are the soft and hard measures of
success. Considering the soft measures of success as the
dependent variable, the results show that Networking ( 𝛽 =
0.5398, 𝑝 = 0.017) is the only factor with a significant and
78.55% of the variation of the soft measures of success. Hence,
Kickstart, Ideaspace, Impact Hub Manila and Launchgarage
must be able to sustain or even improve the networking services
that they are able to provide the startup companies. Looking at
the results, it can also be inferred that the business incubators
programs on Shared Services, Funding and Support, Mentoring
and Incubator Governance into the soft measures of success of
the business incubatees.
On the other hand, for the hard measures of success, the results
show that Shared Services ( 𝛽 = 0.3636 , 𝑝 = 0.032 ) and
Networking ( 𝛽 = 0.5928 , 𝑝 = 0.018 ) have a positive and
significant effect on the hard measures of success at 5% level of
significance. In addition, it was also found that Mentoring
(𝛽 = 0.2888, 𝑝 = 0.085) has a positive and significant effect
on the hard measures of success at 10% level of significance.
The model explains 72.89% of the variation of the hard
measures of success. Furthermore, these results are consistent
with the past literatures. Given this, Kickstart, Ideaspace, Impact
three (3) factors (Shared Services, Networking and Mentoring)
that were identified significant to the success of the business
incubatees. Also, the business incubators should also improve
other programs related to Funding and Support and Incubator
Governance to make the services more effective and translate to
the hard measures of success of business incubatees (See Table 4
in Appendix).
VI. Conclusion
Table 1. Summary of Results
Incubators Significant Factors Incubatees
(OLS Regression)
1 Networking Networking Funding & Support
2 Mentoring Mentoring Mentoring
3 Shared Services Shared Services Shared Services
The results of the regression are consistent with the results of the
cross-case analysis. The qualitative analysis shows that
Networking, Mentoring and Shared Services are the top three
factors that the incubators perceive to be the most important;
while the regression results show that the same factors were all
significant for the hard measures of success. Networking is the
only significant factor for the soft measures of success while the
rest of the factors are insignificant. On the other hand, the factors
perceived by the incubatees as the most important are Funding
and Support, Mentoring, and Shared services. Hence, it can be
inferred that there is a mismatch. Moreover, it can be seen that
the factors perceived by the incubators as the most important are
the same factors that were deemed significant in the regression
results.
Evaluating the incubation programs of Kickstart, Ideaspace,
Impact Hub Manila and Launchgarage, it can be inferred that
majority of the business incubatees are not fully convinced that
the services being provided to them contributed much to the
success of their businesses; both in hard and soft measures of
success. All incubators scored below 4, except for Ideaspace that
succeeded in Soft Measures of Success. Kickstart, Ideaspace and
Launchgarage had close scores while Impact Hub scored the
lowest and has low scores relative to all other incubators in
success measures and factors. In addition, it was seen that there
is a mismatch specifically in what Ideaspace and Impact Hub
perceive as the most important factors relative to the important
factors perceived by their respective incubatees; while for
Kickstart and Ideaspace, there is a similar ranking provided by
their respective incubatees and there is little to no mismatch.
VII. Recommendations Performance.
After conducting qualitative and quantitative analysis, the
researchers provided recommendations based on the results of
this study. The recommendations will be beneficial for different
entities, specifically for academe, business incubators, and
startup businesses. For the academe, they may offer incubation
programs in the university level wherein collaboration with
different courses is encouraged. The incubation program, aside
from catering to entrepreneurship students, should also cater to
the students from other fields such as: accounting and
engineering students, etc. so that the students from the different
fields can share ideas and interact with each other in developing
products or services. It is also recommended that the academe
should conduct more research on the startup industry to provide
students more knowledge about the startup ventures and trends
and encourage them to build their own businesses. 20Competition.pdf
For the incubators, the researchers recommend that they should
prioritize Funding and Support, Mentoring and Shared Services
as these are the most important success factors for the
incubatees. Moreover, based on the results of the regressions,
incubators should also improve the level of Funding and
Support, Mentoring and Incubator Governance that they provide
their incubatees in order to make these factors translate to the
success of the incubatees. Thus, to improve Funding and
Support, they can consider teaming up or partnering with the
government agencies or departments, like Department of
Science and Technology - Philippine Economic Zone Authority
(DOST-PEZA), that can help the incubators fund their startups.
In addition, to improve mentoring services, the incubators
should hire credible mentors who have experienced handling
businesses similar to that of the startups so that the startups can
get valuable suggestions to improve their business. For Shared
Services, the incubators can ask their startups if they need other
services that are not yet being provided to them. In this way,
incubators will know what their incubatees need; thus, allowing
them to find ways to give assistance to their incubatees. Lastly,
for incubator governance, incubators could come up with
training camps or workshops especially for those startups that
are in early stages to provide support and to increase level of
survival. Incubators can also create a specific flow and process
for their incubation program.
Last and most importantly, it is recommended that the incubators
and incubatees be involved in a feedback and evaluation system
to improve the incubation program. Through this, the startups
will be able to voice out their concerns and suggestions in the
current program. Thus, allowing the incubators to provide their
startups with services that match their needs.
VIII. References
Al-Mubaraki, H. & Schrödl, H. (2011). Measuring the
Effectiveness of Business Incubators: A Four Dimensions
Approach from A Gulf Cooperation Council Perspective.
Journal of Enterprising Culture. Vol. 19, No. 4, pp.435–452.
Barnes, J. (1954). Class and Committees in a Norwegian Island
Parish. Human Relations, 7, 39-58.
Benjamins, R. (2009). Effects of Business Incubation on
Knowledge Acquisition of Incubatees and Incubatee
Bull, I., & Willard, G. E. (1993). Towards a theory of
entrepreneurship. Journal of Business Venturing, 8(3), 183-
195.
Cooper, D., & Schindler, P. (2011). Business research methods
(11th ed.). Boston, MA: McGraw-Hill Higher Education
Gujarati, D. and Porter M. (2009). Basic Econometrics.
McGraw-Hill: New York, USA.
Hacketts, S.M., & Dilts, D.M. (2004). A systematic review of
business incubation research. The Journal of Technology
Transfer, 29(1), 55-82
Hunt, S. (1995). The Resource-Advantage Theory of
Competition Toward Explaining Productivity and Economic
Growth. Journal of Management Inquiry, 4(4), 317-332.
Retrieved fromhttp://sdh.ba.ttu.edu/JMI95%20-
%20The%20Resource-Advantage%20Theory%20of%
Moss, T. (2015). Philippine Entrepreneurs Blossom With Help
From Startup Support Network. Retrieved on July 30, 2016,
from http://www.wsj.com/articles/philippine-entrepreneurs-
blossom-with-help-from-startup-support-network-
1428727831
Ruckert-John, J. (n.d.). Qualitative Interview Analysis.
Retrieved April 4, 2016.
Verma, S. (2004). Success Factors for Business Incubators: An
empirical study of Canadian Business Incubators. Retrieved
from https://curve.carleton.ca/system
/files/etd/3e53ae0a-1536-47fe-bf15-
61801227cbdf/etd_pdf/2897244706bf6a1a977d8a1b8c927d
7a/verma-successfactorsforbusinessincubators
anempirical.pdf
 IX. Appendix
Table 3. Summary of Mean Scores Between Incubators
Table 2. Summary of Perceived Level of Importance of
Incubatees
Dependent Kickstart Ideaspace Impact Launchgarage
Factors of Ranking Perceived level of Factors Hub
Success by importance by
Incubator startups in percent Shared
2.7250 3.5846 2.9714 3.0857
Services
Most Least
Important important Funding and
2.5500 3.0769 2.2000 2.3143
Support
Shared 2 0% 25%
KICKSTART Services Mentoring 4.4000 3.9231 3.6000 4.1143

Funding 5 37.5%* 0% Networking 4.2250 4.4769 3.4857 4.0286

There is little to and Support
no mismatch Incubator
3.8750 4.0769 3.6000 3.6000
between what is Mentoring 4 37.5%* 0% Governance
important to the
incubator and Networking 3 25% 0% Soft Measures
incubatees. of Success 3.6750 3.9692 2.8286 3.5143
Incubator 1 0% 75%* (Mean score)
Governance
Hard
IDEASPACE Shared 3 7.69% 23.08% Measures of
3.7000 3.6615 3.0000 3.4286
Services Success
(Mean score)
It can be seen
that there is a Funding 2 46.15%* 15.38%
and Support
* 5 is the highest score
mismatch
between what is
important to the Mentoring 4 15.38% 0%
Table 4. Summary of OLS Regression
incubator and
Networking 5 23.07% 23.08%
incubatees.
Coefficients
Incubator 1 7.69% 38.46%* Variables
Soft Measures Hard Measures
Governance
Shared Services 0.1342 0.3636*
IMPACT HUB Shared 3 28.57%* 14.28%
MANILA Services
Funding & Support 0.1745 -0.1476
It can be seen Funding 1 28.57%* 0%
that there is an and Support
evident mismatch Mentoring 0.1418 0.2888**
between what is Mentoring 2 14.28% 14.28%
important to the
incubator and Networking 4 14.28% 14.28%
Networking 0.5398* 0.5928*
incubatees.
Incubator 5 14. 28% 42.86%*
Governance
Incubator Governance 0.2468 0.0849
LAUNCH- Shared 1 14.29% 42.86%*
GARAGE Services
_cons -1.0102 -1.1296

There is little to Funding 2 14.29% 42.86%*
no mismatch and Support
between what is R-Squared 0.7855 0.7289
important to the Mentoring 5 42.86%* 0%
incubator and
incubatees. Networking 4 0% 0% *Significant at 5% level of significance
**Significant at 10% level of significance
Incubator 3 28.57% 14.29%
Governance

Note: 5 is the most important factor, 1 is the least important