Capabilities over orientation: A contingency-based explanation of early-stage startup performance in emerging markets in Indonesia

Abstract

In today's dynamic business environment, startups face various uncertainties that can influence their success. This study aims to analyze the driving factors of startup success through the influence of entrepreneurial orientation, financial capability, and networking capability on startups in Indonesia. A quantitative research approach was employed, utilizing surveys to measure the relationships among five constructs: entrepreneurial orientation (EO), financial capability (FC), networking capability (NC), startup performance (SP), and environmental turbulence (ET). The study focused on startup companies that met specific criteria: having received a maximum of Series A early-stage funding, operating as a Limited Liability Company (PT), and being in operation for no more than 10 years since establishment. The findings indicate that SP is not significantly impacted by EO (p 0.667 > 0.05). Conversely, FC is positively and significantly influenced by EO (p 0.000 < 0.05). SP is not significantly affected by FC (p 0.252 > 0.05), but it is positively impacted by NC (p 0.019 < 0.05). The study also found that the relationship between EO and SP is not mediated by FC (p 0.254 > 0.05). Additionally, environmental turbulence does not have a significant effect on the relationships between SP and EO (p 0.614 > 0.05), SP and FC (p 0.861 > 0.05), or NC and SP (p 0.971 > 0.05). These results suggest that networking capability plays a crucial role in startup performance, while entrepreneurial orientation's influence is limited within the studied context.