The platforms’ DNA: drivers of value creation in digital two-sided platforms

Abstract

ABSTRACT With the advent of the digital economy, two-sided platforms have gained significant momentum over the last two decades. Contrary to traditional businesses, two-sided platforms do not have linear value creation; instead, they create value by enabling interactions or exchange between two different groups of customers. This configuration creates challenges as well as opportunities and calls for an in-depth investigation in the digital context. This research investigates how digital platforms create value in two-sided platforms. The paper is based on a multiple-case study of four leading digital companies. The sampling is based on a theoretical and replication logic. Both primary and secondary sources are used for the research. This paper indicates that the value created by those digital platforms is based not only on their ability to reduce transaction costs and resolve frictions between two sides, but also on four other drivers (trustworthy environment, data-driven expansions, personalised services, and engagement mechanisms). These drivers enhance and enrich the basic value proposition of matchmaking. The four drivers build upon one another, bringing together two matching value propositions and forming a structure that is represented as the two-sided DNA.