School of Economics and Management Tsinghua U., China
Search for external knowledge is vital for new ventures’ innovative activities. Constrained by internal search scope, they rely on external connections to facilitate their innovation search. Given the emergence of virtual incubators as a novel support institution for new ventures, we try to answer how new ventures utilize their tie with virtual incubator to conduct innovation search. We employed a multi-case study of China's well-known virtual incubator, Tusstar, and interviewed six software new ventures affiliated with it. Our case study illustrate that new ventures, based on their ties with virtual incubator, undergo an innovation search process consisting of three stages: framing, directing, and extrapolating. Throughout this process, new ventures engage in increasingly profound and comprehensive effectuation logic based on external connections, forming more flexible and open search activities by fully leveraging their existing external ties. Overall, our research contributes to the literature by discussing the combination and shift of decision-making logic for new ventures in innovation search. Furthermore, by demonstrating the learning effects of new ventures during innovation search with external connections, our study contributes to the literature on innovation search.
