Managing the Identity-Size Paradox in Platforms: The Case of Platform Cooperatives

Abstract

Platform organizations operate between two different competition logics: winner-takes-all, which prioritizes platform size, and distinctiveness logic, which prioritizes platform identity as a strategic dimension. While the platform strategy literature has primarily focused on the former, outlining ways to quickly grow the network of users and complementors, it has largely ignored platform identity. A key challenge for platforms is, however, to manage tensions that arise when both size and identity constraints are present. To explore how strategic tensions between platform size and platform identity are manifested and what platforms do to address them, we employ a multi-case study of platform cooperatives – an organizational form that commences from a distinctiveness logic. We find that platform cooperatives deal with several size-identity tensions as they go through three core phases: (1) enacting identity as a vehicle for growth; (2) diluting identity to enable growth; (3) growth-enabled identity redefinition. Moving across these phases, we identify the underlying strategic activities that platforms use to navigate what we termed as the ‘identity-size paradox’. Overall, we contribute to the literature on multi-sided platforms, and particularly in regards to platform strategy, as well as to the broader platform economy literature. Keywords: platform strategy, new organizational forms, platform cooperatives, platform identity