THE INFLUENCES OF TECHNOLOGICAL CAPABILITY AND MARKET ORIENTATION TOWARD BUSINESS MODEL INNOVATIONS OF DIGITAL STARTUPS

Previous studies have addressed the importance of business model innovation (BMI) for established firms. However, there are limited studies on BMI in digital startups. Due to their characteristics, established firms differ from startups; thus, the findings of the previous studies cannot be applied straightforwardly to such startups. Because each startup experiences different types of BMI, they presumably possess varying types of technological capability and adopt market orientation differently. The links among technological capability, market orientation, and BMI, nevertheless, are not clearly articulated in the literature. Therefore, it is necessary to conduct further investigations. Using four Indonesia’s digital startups as cases, two research questions are posed: (1) What kinds of technological capability and market orientation are needed for digital startups to conduct their BMI? (2) How can a set of technological capability and market orientation lead to different BMIs experimented by digital startups? The findings reveal that a certain type of BMI demanded startups possess a certain type of technological capability and adopt a peculiar type of market orientation. These refer to ecosystem- and specialisation-focused technological capability, and market orientation toward specialisation and ecosystem. Based on these findings, practical implications are presented at the end of this paper.