Entrepreneurial Transition on a Digital Platform: Relationships and Consumption

Abstract

Third-party complementors as entrepreneurs boost digital platforms. We explore how platform organizations may identify which individuals on platforms that are likely to transition from product users into user entrepreneurs. We theorize and demonstrate that social influence explains transition into entrepreneurship, while we observe no significant effects from information access or social network status. Specifically, we find that both network exposure to other entrepreneurs and the content of social relationship connections, namely encouragement from other platform participants, propel transitions towards user entrepreneurship. Second, we show that consumption volumen of digital platform products is a novel demand-side explanation for entrepreneurial transition into supply-side activities. Our study is based on automatically recorded online behavioral data in a setting that facilitates new insights into entrepreneurial transition in digital platform organizations.