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The primary purpose of this study is to study the moderating effect of entrepreneurial leadership and competitive advantage in the relationship between the business model innovation and the performance of the start-up business. We hypothesized that business model innovation has a significant association with the performance of the start-up, and entrepreneurial leadership or competitive advantage connects substantially to the business model innovation and start-up. Fifty-one respondents participate in this study. The partial least square statistical technique is used to analyse the data, which is appropriate for parametric analysis for such a sample size. The analysis shows a significant relationship between business model innovation and start-up performance. Also, there are significant relationships of entrepreneurial leadership and competitive advantage to business model innovation. However, it shows no direct relationship between entrepreneurial leadership and start-up; the association is not direct but indirect. The null hypothesis that there is no direct association between competitive advantage and start-up performance is rejected. There is a negative association between competitive advantage and start-up. Both entrepreneurial leadership and competitive advantage improve the relationship between business model innovation and start-up. However, they must be interpreted with caution Corresponding author: Joni Phangestu Email addresses for the corresponding author: Jonphang@yahoo.com First submission received: 10th May 2020 Revised submission received: 21st June 2020 Accepted: 26th June 2020 Introduction Startup is a project of individual or team intended to change their environment through the creation of economic value, usually through innovation (Baregheh, Rowley and Sambrook, 2009). Start-up is the early stage in an entrepreneurial venture where entrepreneurs are still searching for its replicable and scalable business model (Blank, 2013; Bruyat and Julien, 2001). Previous studies showed that entrepreneur ventures in this stage were facing extreme uncertainty and a high failure rate (Haddad, et al., 2020). The probability of a startup to fail is very high (Cambridge Associates, 2017; Griffin, 2017). The failure rate is estimated between 50% to 80% and may reach up to 90% (Laitinen, 1992; Wetter and Wennberg, 2009; Krishna, Agrawal, and Choudhary, 2016). In other studies, they found that 92% of the start-up venture fail within the first three years of operation (Marmer, Hermann, Dogruttan and Berman, 2012b; Start-up Genome LLC, 2018). This percentage rate was a large percentage number of failures. Until recently, we still do not know the specific reasons why startup failed (Griffi, 2017). The question of why most start-ups failed, while some other succeeded remain central questions that attract most researchers in this field (Cooper, 1993; Spiegel et al., 2016). Journal of Business and Retail Management Research (JBRMR), Vol. 14 Issue 3 July 2020 www.jbrmr.com A Journal of the Centre for Business & Economic Research (CBER) 54 Review of literature Business model innovation The business model is described as how an organization creates, delivers, and capture value and was introduced by Osterwalder, Pigneur, and Clark (2010); it enables a firm to successfully implement its strategy (Romero, Sánchez, and Villalobos, 2017). The business model canvas comprises nine basic building blocks, namely; the customer segment, value proposition, channel distribution, customer relationships, key resources, key activities, key partnerships, revenue streams, and cost structure. According to Haddad et al. (2020), there are existed business model patterns that can represent the aspects of the business model innovation. These business model patterns are subscription, advertising, pay per use, freemium, add-on, premium, contractor, long tail, data as a service, cross-selling, e-shop, crowdsourcing, multi-sided platform, ultimate luxury, and customer lock-in. All of these business model patterns can be grouped into three dimensions (revenue streams and payment/pricing models, value proposition, and channels and relations to external actors). However, another business model concept that had a growing interest was the business model innovation (Aspara et al. 2010; Spieth et al. 2014). It is about developing new ways to capture, create, and deliver value (Preuss, 2011; Claus, 2016; Wells, 2008). Previous studies show that the business model innovation has a significant relationship with business performance (Zott and Amit, 2010; George and Bock, 2011; Afuah and Tucci, 2001). Scholars find that the business model innovation can represent powerful competitive tools that cause companies to gain competitive advantage (Zott, Amit and Massa, 2011; Amit and Zott, 2012; Porter, 1990; Weking et al., 2018). Studies showed that business model innovation, in particular, became the success and a valuable capability of a firm (Aspara et al. 2010; Lindgardt et al. 2009; Chesbrough 2010; Amit and Zott 2012). In terms of the start-up, some business model patterns found to outperform others on different performance measures to the success of start-up (Haddad, et al., 2020). The contractor pattern seems to enhance revenue and cash flow, while add-on patterns influence growth. Since the lock-in pattern imposes switching costs, then it is highly correlated with start-up valuation (Gassmann, Frankenberger, Csik, 2017; Zauberman, 2003). It was apparent that the business model innovation affects start-up performance. However, most studies in the business model are qualitative method (Lambert and Davidson, 2013; Spiegel, et al., 2016). We feel that more research on the quantitative approach is needed. Entrepreneurial Leadership Entrepreneurial leadership is a person who can restructure their organization that enables them to seize new opportunities and to improve the ability to invent ways wherein they can compete in a highly unpredictable environment (Huang et al., 2014). The characteristics of the entrepreneurial leadership are described as follow, having the aptitude to visualize for the firm future success, forward-thinking, ability to acknowledge opportunities, ability to inspire and influence their team members in implementing progressive entrepreneurial actions (Sawaean, Ali, 2020), solving problems through creative methods, and reinforce a culture of organizational innovation (Rae, 2017). Gupta, MacMillan, and Surie (2004) conceptualized entrepreneurial leadership in three dimensions, Innovation (nurturing creativity among team members and create novel products and services), proactiveness (motivating individuals to continually compete with other organizations, and risk-taking (willingness to face uncertainty and take responsibility). There seems that entrepreneurial leadership has a relationship to firm growth as it creates a competitive advantage and ensuring sustainability (Palalic, 2017). However, the study on the relationship between entrepreneurial leadership and business model is still limited; thus, an investigation on the relationship needs to be conducted. Competitive Advantage Competitive advantage is essential since business sustainability is achieved through competitive advantage, which, upon the formulation of the strategy, is created in value to customers. This value may be in cost leadership, product or service differentiation, or the speed of customer service in the niche market. Indeed, competitive advantage is defined as the firm's capability to differentiate itself compare to the other competitor (Sultan and Mason, 2010). Jones (2003) described the competitive advantage strategy into three generic strategies that cover cost leadership, differentiation, and focus. These strategies are commonly used by firms and able to respond to business objectives efficiently. Journal of Business and Retail Management Research (JBRMR), Vol. 14 Issue 3 July 2020 www.jbrmr.com A Journal of the Centre for Business & Economic Research (CBER) 55 Startups must look for strategies and ways to create innovations to gain new competitive advantages (Potjanajaruwit, 2018). It is necessary to create economic values for customers (Barney and Hesterly, 2010) and reducing business operating costs (Zhang and Hartley, 2018). Although its essential for the company to deploy its resources to gain a competitive advantage in all the activities of the company's value chain, the creation of the competitive advantage varies with the business environment. The ability of each company to create competitive advantage will differ; therefore, the competitive advantage is a significant problem for start-ups because it leads to business survival and sustainability (Zaridis, 2009). The Research Framework Many start-ups fail in their very early stage of operation, but the reason behind these are still unclear (Griffin, 2017). Thus, the study needs to be conducted. Studies recently have been done on the relationship between business model innovation and start-up success. However, only a few studies that check the moderating effect of the entrepreneur leadership and competitive advantage in the relationships between business innovation and startup performance. The research framework of this study is shown in

journal of business and retail management research/the journal of business and retail management research

The Moderating Effect of Entrepreneurial Leadership and Competitive Advantage on the Relationship Bbetween Business Model Innovation and Startup Performance