Fish Out of Water: Translation, Legitimation, and New Venture Creation

We draw on institutional theory to study a common type of new venture creation that has been neglected in the literature: the translation and legitimation of an organizational form from a different – and misaligned – institutional context. To do so we conducted an in-depth case study of H-Farm, an Italian venture that was founded as a digital business incubator, a type of organization that first emerged in Silicon Valley and other US technology regions. Our study contributes to the growing literature on legitimation and new venture creation by illuminating the three-way legitimacy challenge – local acceptance, versus category conformity, versus category distinctiveness – inherent in this type of new venture creation, and uncovering the strategies that entrepreneurs can enact to address it. We also shed light on the temporal nature of new venture creation by showing that the legitimacy pressures experienced by entrepreneurs may vary significantly as ventures mature, and challenge the notion, prominent in the literature, of a specific “legitimacy threshold” that new ventures are required to reach. Finally, unlike much of the existing literature, our model theorizes translation as an iterative, dynamic and ongoing accomplishment rather than a “one off” activity with clear beginning and end points.