Indonesia’s Technology Startups: Voices from the Ecosystem
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Indonesia’s Technology Startups - Asian Development Bank
1 Introduction
Along with the expansion of digital technology, the past 2 decades have witnessed the rise of a new type of business entity—the startup. It is not merely a business that starts up, but one that possesses an innovative technology—or uses an existing technology in an innovative way—and is delivered through a unique business model. Because many startups harness the power of the internet, they can rapidly scale their operations to reach thousands or millions of potential customers. Innovative technology, business model, and scalability are thus the defining characteristics of startups.
Startups start small, but they are inherently different from traditional small and medium-sized enterprises (SMEs). They differ in innovation and technology, but also in other areas. Hecht (2017) suggests that the differences can be seen in their growth purpose, method of funding, and final goal. The purpose of an SME is to make profit from serving the market efficiently. Funding is provided through bank loans, and the end goal is to build a self-sustaining and long-lasting business. A startup, on the other hand, seeks to disrupt the market with a new technology and business model. It is funded by venture capital, with investors taking a share of ownership. The end vision of startups is either an initial public offering (IPO) or sale and takeover by another, larger