Two Goliaths, Same Difference? The Impact of Platform Architecture on Social Networking Start-up’s

Abstract

We study how platform architecture affects different aspects of the performance of a multihoming social media complementor that is not the leader in the industry. There is a paucity of empirical evidence that disentangles either the different aspects of complementor performance on platforms or the attributes of platforms themselves. Using proprietary data on a new social networking app, we examine how platform openness and complexity impact the app's user performance, functional performance, and how the performance measures interact. We find that platform openness has a negative relationship to user performance, just as platform complexity does. However, for functional performance, we find a positive relationship for openness but a negative one for complexity. We also show a negative relationship between functional performance and user performance. Controlling for this negative relationship, we find that the platform architecture's main hypothesized effects on user performance and functional performance remain unchanged. The study has important implications for platform competition and for start-up apps reliant on user-generated content that are considering growing their user base through multihoming and are not the leaders in the industry.