Empowering knowledge-based interaction in digital startup

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Digital startups are growing fast around the world, but new digital startups that are less than three years old or did not materialize when it came to funding while the business model is quite promising. Various literature shows that digital transformational leadership can encourage knowledge sharing and an organization's absorptive capacity to improve performance. This research investigates whether digital transformational leadership and empowering knowledge-based interaction, as well as the power of absorptive capacity, will be able to maintain digital startup sustainability through the improvement of performance. 144 digital startups that are established in a limited corporation and registered in the Baparekraf (Indonesia Tourism and Creative Economy Agencies) were used as the purposive sampling. Data collection was done through online questionnaires from each startup leader and processed with SmartPLS 3.0. The results of the research findings showed that the higher the degree of digital transformational leadership, the higher the degree of the digital performance of startups that include traction and financial performance, and also increased empowering knowledge-based interaction in the form of encouraging goal-oriented participative involvement, intra-team knowledge exchange, and continuous interactive engagement. Empowering knowledge-based interaction develops an absorption capacity process to produce the performance of digital startup organ-izations.