The Influencing Factors for Business Start-up Intention

in Social Media by UTAUT Perspective

Yasmin Chairunisa Muchtar, Fadli, and Inneke Qamariah

Department of Management, Universitas Sumatera Utara, Jl. Prof. T.M Hanafiah, SH, Kampus USU, Medan, Indonesia

Keywords: Performance Expectancy, Effort Expectancy, Social Influence, Facilitating Condition, Social Media.

Abstract: According to Sox et al. (2014), Millennials are rising to 75% of the worldwide workforce by 2025 and

entrepreneurship is an interesting profession for Millennials. Millennials have been recognized as a distinct

generation which has higher exposure to internet-based business platform namely social media. Social media

has offered promising opportunities for business due to its flexibility and ability to reduce the complexity of

business entry barriers compared to traditional business platform. It has attracted Millennials to utilize social

media for business start-up especially for those who are interested to select entrepreneur as their profession.

Hence, this study aims to examine factors that influence the acceptance and use of social media for business

start-up. Result shows that partially, performance expectancy, effort expectancy, social influence and

facilitating condition have significant influence on the behavioral intention to use social media for business

start-up. Moreover, simultaneously performance expectancy, effort expectancy, social influence and

facilitating conditions have a significant effect on the behavioral intention to use social media for business

start-up.

1 INTRODUCTION

Millennials generation was born in the world of new

technology and adjusted to various forms of

information technology. They are well connected to

the internet which is identified by the use and

adoption of technology in their routine activity. Refer

to the Indonesian Internet Service Providers

Association (APJII), internet users in Indonesia in

2018 more 54.7% of the total population, where the

highest composition falls were at ages group 19-34

years old.

The number of millennials has increased to 75%

of the global workforce by 2025, their entrepreneurial

mindset has the potential to create employment in the

coming year (Sox et al., 2014). The Millennium

predicts entrepreneurship as an attractive life path.

Millennial as a digital generation is familiar with

social media. Almost 47% of smartphone owners visit

social media platforms every day. Users are now

increasingly using their smartphones to access social

media platforms (Nielsen, 2014). This has created

profitable business opportunities for Millennials who

are interested in choosing entrepreneurs as their

career path.

Nevertheless, among Millennials, there is

restricted research which peculiarly investigate the

intention to use social media for business start-up.

Previous research focused on the behavioral intention

to use internet marketing among entrepreneurs (Tan

et al., 2013) rather than the social media for business

start-up. Consequently, the focus of this research is to

analyze factors that influence the acceptance and use

of Social media for business start-up.

1.1 Research Aim

This study aims to examine factors that influence the

acceptance and use of social media for business start-

up.

2 LITERATURE REVIEW

2.1 Unified Theory of Acceptance and

Use of Technology (UTAUT)

Venkatesh et al. (2003) suggest the UTAUT and has

become a common model applied by scholars in

examining the intention and use of behavior towards

498

Muchtar, Y., Fadli, . and Qamariah, I.

The Inﬂuencing Factors for Business Start-up Intention in Social Media by UTAUT Perspective.

DOI: 10.5220/0009307904980503

In Proceedings of the 2nd Economics and Business International Conference (EBIC 2019) - Economics and Business in Industrial Revolution 4.0, pages 498-503

ISBN: 978-989-758-498-5

technology (Chua et al., 2018; Tan et al., 2012; Latif

et al., 2011). Adoption of technology with UTAUT

theory derives with the theory of Diffusion of

Innovation (DOI), Social Cognitive Theory (SCT),

Theory of Planned Behavior (TPB) and Technology

Acceptance Model Theory (TAM). These theories

create four key constructs that influence behavioral

intentions and use behavioral. The four constructs

involve performance expectancy, effort expectancy,

social expectancy, and facilitating conditions.

2.2 Social Media

Social media is the media used by consumers to share

text, images, sound, and video information both with

others and companies and vice versa (Kotler and

Keller, 2016). Some social media sites that are

popular today include Instagram, Twitter, Facebook,

and YouTube. The use or utilization of social media

is divided into two, namely: 1) Social Media increases

the power of individuals by providing higher roads

without excessive support from users (Curran &

Lennon, 2011). 2) Using Social Media, can help or

restore relationships between new and old users, and

develop communities that collaborate to facilitate

problems and solutions for themselves and their

business (Meredith & O'Donnell, 2011). 3) Social

Media platforms have large audiences because of

their networking and community mobilization

capabilities and this creates an opportunity for

businesses to promote and sell products or services

directly to these users. 4) These revenue/business

models used by social media are very new

approaches, and more empirical research is required

to optimize these model for better returns (Rathore

and Ilavarasan, 2017)

Indicators of social media according to Mayfield

(2008) are 1) participation, social media encourages

contributions and feedback from everyone interested.

2) openness, most social media services are open for

feedback and participation. They encourage voting,

comments and the sharing of information. 3)

conversation, whereas traditional media is about

“broadcast” (content transmitted or distributed to an

audience) social media is better seen as a two-way

conversation. 4) community, social media allows

communities to form quickly and communicate

effectively. Communities share common interests,

such as photography, political issues or favorite

television and radio programs. 5) connectedness,

most kinds of social media thrive on their

connectedness, making use of links to other sites,

resources, and people.

2.3 Millenials

People born between 1980 and 2000 is called the

millennial generation( Lloyd et al. 2013). They are

labeled as Nexters, Generation Y, and the Nexus

Generation (Twenge, 2011). It is bigger than 25 % of

Millenials have a job whiches not required the

education level they have possessed. Millennials have

demonstrated the interest to create their job such as

starting up a new business. (Intuit Canada, 2013)

Ng et al. (2010) investigated about perceive

career decision making of Millenials and found that

they wish to have a different path of career than the

past generation. They prefer employers who support

the progress along the career path by providing

training. While Gursoy et al. (2013) discovered

millenials highlight work-life balance, desire good

payment and benefits, as well as hope for the potential

of rapid career advancement, a fruitful working

experience. Those combinations create

entrepreneurship as a favored option for Millenials.

2.4 Performance Expectancy

Brown et al. (2016), performance expectancy can be

defined as the belief of a person on how much the

technology will be beneficial for the increase of

performance. Al-Gahtani et al. (2007) produced

evidence that performance expectancy has a

significant role in influencing the behavioral intention

of teachers to utilize digital learning apps since it

eases their job and enhance the effect of education.

Among all the determinant factors of behavioral

intention to apply mobile apps, it was proved that

performance expectancy is the strongest determinant

(Chong, 2013). The similar result by Wong et al.

(2015) found that performance expectancy would

influence the behavioral intention significantly as

well as the use behavior for adopting the technology.

Therefore, the following hypothesis is proposed:

: Performance expectancy has a significant effect

on the behavioral intention to use social media for

business start-up.

2.5 Effort Expectancy

Venkatesh et al. (2012) proposed that effort

expectancy is the amount of ease linked with the use

of certain technology and acknowledged as a crucial

factor to determine the user's behavioral intention to

use the technology(Wong et al., 2015). In addition,

Zhou et al. (2010) stated there is a direct association

between effort expectancy and behavioral intention

The Inﬂuencing Factors for Business Start-up Intention in Social Media by UTAUT Perspective

499

based on UTAUT constructs. The lesser the effort to

understand that technology the higher the user’s

adoption of that technology. A study from Yang

(2015), analyzing young consumer's behavioral

intention of mobile shopping apps. Results showed

that effort expectancy was able to predict the adoption

of mobile apps positively. There are three constructs

namely perceived ease of use, complexity, and ease

of use.

: Effort expectancy has a significant effect on the

behavioral intention to use social media for business

start-up.

2.6 Social Influence

Social influence significantly affects the behavioral

intention of users to adopt mobile commerce (Chong,

2013). As conveyed by Martin and Herero (2012), an

individual is likely to follow the opinion and behavior

of their respected group. Venkatesh et al. (2013)

explains social influence as the degree to which of a

person care to the perception of others who are

essential for that person. Young adults who desire

social acceptance will be affected by their peers

instead of family members in terms of the intention to

use mobile apps (Taylor et al., 2011), especially in

social networking apps in comparison with other

mobile apps (Kucukemiroglu and Kara, 2015).

: Social Influence has a significant effect on the

behavioral intention to use.

2.7 Facilitating Condition

Facilitating conditions is a vital factor for

entrepreneurs to use IT innovation in the market.

Entrepreneurs tend to have higher interest to use the

technology if the infrastructure and special training

support are available. Technology with outstanding

user interface, simple access, navigation, and

searching are among the requirement of facilitating

condition that should exist which will support the

usage of internet marketing (Fang and Salvendy,

2003); Siddiqui et al, 2003; Yang, 2010), specifically

when the guidance is properly supplied. Other

importantly conditions namely cost and other

resources linked with the usage, as well as the prior

knowledge that should be possessed by the user

before using internet marketing. These are essential

factors of facilitating, conditions which influence

behavioral intention (Ajzen, 1991; Taylor and Todd,

1995). Based on those reasons, the following

hypothesis is:

: Facilitating condition has a significant effect on

the behavioral intention to use social media for

business start-up.

2.8 Behavioral Intention to Use Social

Media for Business Start-up

Aula (2010: 43) defines SM as a place where

customers can communicate directly with their

favorite organizations and collect more information

about the organizations’ products instead of simply

providing a platform for individuals to keep related

with their family and friends. Behavioral intention in

this study is defined as the users’ intention rather than

the actual use of social media. Behavior intention is

the intention to use social media in the near future

over the traditional business start-up. According to

Saphero (1982); Krueger and Brazel (1994), Intention

is an individual’s desire to pursue a given behavior

and represent an individual’s commitment toward a

specific behavior. In this study, behavior intention

refer to the degree to which Millennials plan to use

social media for business start-up.

3 METHOD

The type of this research is a case study located in

University of Sumatera Utara. The population in this

research is 894 students from the Faculty of

Economics and Business and Faculty of Public Health

batch 2017 in the University of Sumatera Utara that

had already received entrepreneurship courses. All of

the university students can be categorized as

Millennials, born from 1980-2000. As these faculties

have an entrepreneurship curriculum and the students

are willing to be entrepreneurs. Samples are selected

by utilizing the simple random sampling. A simple

random sample is a subset of a statistical population

in which each member of the subset has an equal

probability of being chosen. The number of samples

is 276 Millennials by using slovin method.

This research used two types of data resources,

which are: (1) Distribution of Questionnaires, and (2)

Documentations Studies. Multiple linear regression

analysis is used as data analysis technique to discover

the influence of the independent variables, which are

Performance Expectancy (X1), Effort Expectancy

(X2), Social Influence (X3), and Facilitating

Condition (X4) to the dependent variable that is

Behavioral Intention to Use Social Media for

Business Start-Up (Y). Also, this research is using

descriptive statistical analysis method.

EBIC 2019 - Economics and Business International Conference 2019

500

4 RESULTS AND DISCUSSION

Table 1: Characteristics of Respondents.

Frequenc

Business

Experience

Yes 108 39.1

No 168 60.9

Total 276 100

Duration of

Social Media

Use for

Shopping

–

1 Yea

0 0

1,1 Years – 2,1

Years

15 5.4

2,2 Years – 3,2

Years

7 2.5

3,3 Years – 4,3

Years

8 2.9

4,4 Years – 5,4

Years

52 18.8

5,5 Years – 6,5

Years

29 10.5

6,6 Years – 7,6

Years

59 21.4

7,7 Years – 8,7

Years

45 16.3

8,8 Years – 9,8

Years

15 5.4

9,9 Years – 10,

9 Years

46 16.7

Total 276 100

SHOPPING FROM

SOCIAL MEDIA

SELLING

FROM

SOCIAL

MEDIA

No Social

Media

Frequency % Frequency %

Faceboo

Yes

51 18.5

10.

225 81.5

246

89.

2 Twitter

Yes 7 2.5 0 0

269 97.5

276

Instagra

Yes

105 38.0

104

37.

171 62.0

172

62.

4 Etc.

Yes 82 29.7 15 5.4

194 70.3

261

94.

Table 1 demonstrates that the majority of millennials

have used social media for shopping for more than 6.5

years at 59.8% (165 peoples). The majority of social

media users through Instagram, while the lowest rank

uses Twitter. In making purchases, millennials prefer

to use Instagram to sell compared to other social

media applications.

Table 2: The Result of Multiple Linear Regression

Analysis.

No Variables Coefficients

Values

Signif-

icant

1 Constant -0.417 -0.528 0.598

2 Performa-

nce

Expec-

tancy (PE)

0.486 8.469 0.000

3 Effort

Expectan-

(

)

0.084 2.266 0.024

4 Social

Influence

(

)

0.184 3.461 0.001

5 Facilitati-

Conditi-

(

)

0.036 1.019 0.309

𝑅



0.630

7 (F-

Statistic =

118.263

)

0.000

It is found the Multiple Regression Analysis Model

is:

Y = -0.417 + 0.486PE + 0.084EE + 0.184SI +

0.036FC + e

Table 2 shows the two predictor variables, partially

Performance Expectancy (Sig. = 0.000 < 0.05), Effort

Expectancy (Sig. = 0.024 < 0.05), and Social

Influence (Sig. = 0.001 < 0.05) are significantly

affecting Behavior Intention to Use Social Media for

Business Start-Up. On the other hand, the remaining

one variable, which is Facilitating Condition (Sig. =

0.309 > 0.05) is insignificantly contributing to

Behavior Intention to Use Social Media for Business

Start-Up. The coefficient determination of this

research is 0.630, which means that Performance

Expectancy, Effort Expectancy, Social Influence, and

Facilitating Condition contributed 63% to explain

Behavior Intention to Use Social Media for Business

Start-Up. While the remaining 37% is explained by

other variables.

The Inﬂuencing Factors for Business Start-up Intention in Social Media by UTAUT Perspective

501

Table 3: Summary of Hypothesis Tests.

Hypo

thesis

No.

Statement

Decisio

Performance Expectancy has a

significant effect on the

behavioral intention to use

social media for business start-

Support

Effort Expectancy has a

significant effect on the

behavioral intention to use

social media for business start-

Support

Social Influence has a

significant effect on the

behavioral intention to use

social media for business start-

Support

Facilitating Condition has a

significant effect on the

behavioral intention to use

social media for business start-

Not

Support

Partially, performance expectancy, effort

expectancy, and social influence have a significant

effect on the behavioral intention to use social media

for business start-ups. Meanwhile, another variable,

namely facilitating conditions, does not significantly

influence behavioral intention for the use of social

media in starting a business.

Result indicates that performance expectancy

significantly influences behavioral intention by

utilizing social media in accordance with research by

Al-Gahtan et al. (2007). This proves that millennials

consider that using social media will facilitate them

in starting a business, which will certainly support

productivity and efficiency in business management

when they run their businesses.

The effort expectancy variable also significantly

influences behavioral intention by utilizing social

media in accordance with research by Zhou et al.

(2010). This shows that social media is a technology

that is easy to use, and not complicated so it does not

require much effort to use it. Therefore, it is very

reasonable to find from the results of research that

effort expectancy in millennial generation has a

significant effect on behavioral intention in starting a

business by utilizing social media.

Based on Chong (2013), social influence

influences behavioral intention to adopt Mobile

Commerce technology. This is consistent with the

results of research in which social influence also

influences behavioral intention to start a business by

utilizing social media. As Martin and Herero (2012)

pointed out, a person tends to follow the opinions and

behavior of a group of people whom he considers to

have an effect on him. Especially for the younger

generation who are very influenced by the opinions

of friends and family members in terms of the use of

social media that can be used in starting a business.

Facilitating condition is an important factor in a

person's behavioral intention to adopt a technology

such as social media. Some important facilities such

as cost, ease of navigation, search engines, and easy

access can influence a person's confidence to adopt a

technology (Ajzen 1991; Taylor and Todd 1995).

However, the results of this study indicate different

things where facilitating conditions do not

significantly influence behavioral intention in starting

a business by utilizing social media. Almatari et al.

(2012) and William et al. 2015 states that in several

previous studies facilitating conditions are not

variables that can influence one's behavioral intention

when performance expectancy and effort expectancy

exist. So it can be explained that today's young

generation can take advantage of social media

without depending on the user manual.

5 CONCLUSION

The conclusion of this research is performance

expectancy, social influence and effort expectancy

have a significant effect on the behavioral intention to

use social media for business start-up. Meanwhile,

facilitating condition is insignificantly affecting the

behavioral intention to use social media for business

start-up. Also, simultaneously performance

expectancy, effort expectancy, social influence and

facilitating conditions have a significant effect on the

behavioral intention to use social media for business

start-up.

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