From Chicken-or-Egg to Platform Ecosystem: Mobilizing Complementors by Creating Social Foci

Abstract

Firms frequently rely on an ecosystem of complementary goods and services to create and capture value from innovation. However, strategies for cultivating nascent ecosystems have received limited attention. In particular, firms building platform-based ecosystems must address the quintessential “chicken-or-the-egg” problem to jumpstart the virtuous cycle of network effects underlying platform competitive advantage. While prior work focuses on economic approaches to building an ecosystem (e.g., complementor subsidies), we highlight the social and organizational mechanisms by which platform owners cultivate relationships with potential complementors. Platform owners can generate momentum around their platform by creating social foci. As forums for face-to-face interactions, social foci orient potential complementors towards the platform and towards one another. We explore the consequences of platform owners sponsoring “hackathon” software development events, an example of social foci being used as a channel for platform evangelism. We construct a novel dataset of 1,302 software developers participating in 167 hackathons supported by a set of 30 separate platforms. Our longitudinal analysis of the codebase of third-party application developers finds that attending a platform-sponsored hackathon increases the developer’s rate of adoption and usage of the platform. Consistent with prior literature, we find monetary subsidies encourage platform adoption. Extending prior work, we theorize and find support for social mechanisms affecting platform adoption. Hackathons appear to act as forums for social learning, tacit knowledge transfer, and socially-induced shifts in expectations over a platform’s future network size, which are associated with a heightened likelihood that a software developer adopts a platform.