An Empirical Study on Factors that Influence the Digital Startup Sustainability : The Mixed Methods Approach in Indonesia

Abstract

About 90% of startup implementation in Indonesia failed due to the products and markets incompatibility and the funds that run out. The Agency of Creative Economy targets to reduce failure rate to 70% because startup delivers numerous contributions to boost the digital economy. In order to achieve the target, a holistic understanding of factors that influence startup’s sustainability becomes a fundamental baseline. This research aims to identify and analyze those factors with the mixed method approach. Literature review and expert judgment are combined to provide the conceptual model with 11 hypotheses in 5 dimensions: Finance, Organization, Product, Market, and External Environment. The research found there are 10 factors identified, 1 factor namely Minimum Viable Product (MVP) is the significant factor influencing business sustainability in the digital startup based on the PLS-SEM result. The complete results have been affirmed by the expert judgment as part of triangulation process. By leveraging those factors, startup can perform the necessary strategies to develop their business and avoid the failure.