The Effect of Entrepreneurial Passion and Opportunity Awareness toward the Sustainability of Startup Businesses

Abstract

The number of unemployment rate in Indonesia that has been decreasing is caused by the growth of entrepreneurship in Indonesia, which is proven by the number of startup businesses in Indonesia reaching the sixth highest worldwide. Nevertheless, startup businesses have high failure rate, where two of three established startup businesses cannot sustain. With purpose to find out the reason of this phenomenon, this research aims to find out whether entrepreneurial passion and opportunity awareness have significant effects to startup businesses’ sustainability. This research uses the startup businesses of Ciputra University’s 2015 batch students that have been running for minimum 2 years as the sample. These startup businesses are aimed to be able to represent startup businesses since from more than 200 startup businesses established, only 42 startup businesses that sustain. Questionnaires are distributed to the samples using 5-points Likert-scale, and the data collected is then analyzed using Multiple Linear Regression. The result shows that entrepreneurial passion has significant effect toward startup business sustainability, but it does not go the same way with opportunity awareness. Opportunity awareness does not affect significantly toward startup business sustainability since it needs to be converted into opportunity recognition and opportunity exploitation to give significant effects.

Unicorns’ growth and financial flexibility before and after the IPO

“…Young companies face considerable limitations of financial resources; for this reason, the ability to attract financial resources often becomes the guarantee of success and growth of young companies. In this context, the insufficient knowledge about the unicorns (private companies funded from external sources and with at least 1 billion market value [ 17 ]) and their ability to grow from small companies to giant worldwide unicorns are mysterious for the researchers, as most of such companies fail because of the fast growth and the lack of resources during the first years since their establishment (based on different authors the failure rate is 2/3 rds [ 18 ] or 8 out of 10 [ 19 ] companies). The lifecycle of these companies is short [ 20 ], and being private results the high uncertainty and data limitation for the analysis of the unicorns.…”