Being flexible through customization: The impact of incubator focus and customization strategies on incubate survival and growth

Given the increased importance of flexibility in company development models, it is not surprising that start-up support structures such as business incubators give more attention to flexible service offerings. In this paper, we argue that an incubator’s service customization strategy is ideal in situations with high incubatee need heterogeneity. Moreover, we examine how an incubator’s industry segmentation efforts are related to its customization strategy, and examine its subsequent impact on incubatee survival and growth. Based on an empirical study using data from 166 Brazilian incubators, we find that service customization is a significant mediator through which an incubator’s industry focus can influence incubatee survival and growth. Moreover, contrary to the common assumption that an industry focus automatically leads to a higher incubatee performance level, we fail to find any evidence for a significant direct relation between an incubator’s industry segmentation and incubatee survival and growth.