Digital Multi-sided Platforms Research Articles

Effectuation in digital multi-sided platform startups: An entrepreneurial journey through open innovation process

A paradox arises in platform-based open innovation, wherein digital Multi-Sided Platform (MSP) firms with little initial co-creation ability can successfully adopt an open innovation strategy that typically requires a high level of co-creation capacity. This study aims to fill this gap by theoretically exploring the connection between effectuation, which involves entrepreneurial action based on a given set of means and the selection of possible effects, and the open innovation process with co-creation capacity. The objective is to contribute to the significant growth of digital MSP startups. This study investigates the process of open innovation based on platforms in the context of resource constraints, limited knowledge, and uncertainty. The outcomes of a quantitative study including 70 digital MSP startups indicate that the most efficient route for these businesses to achieve Innovation Performance is by first developing Effectuation, followed by Integrative Capabilities and Co-Creation Capacity, and last, Innovation Performance. However, in this shortest path, the involvement of Crowds or Communities Management Practices plays a role in partially moderating the relationship between Effectuation and Integrative Capabilities. Platform-based innovation serves as the point of integration between effectuation theory in entrepreneurship research and open innovation strategy in strategic management research. The bridge connecting these two fields has significant implications for research on platform-based innovation in the field of strategic entrepreneurship.

Leading the transition to multi-sided platforms (MSPs) in a B2B context – The case of a recycling SME

Digital multi-sided platforms (MSP) are emerging as powerful forces to disrupt existing industry value chains in B2B. SMEs can play a crucial role in the emergence of digital platform ecosystems. Although much research has been carried out on the design and governance of digital platforms, research mainly focused on greenfield approaches in B2C and neglected the process of transformation of an established company in B2B to a MSP. Recognizing this unique opportunity for SMEs, we addressed this research gap by examining the journey of a B2B-SME to a MSP, capturing and presenting the dynamics of barriers, actions, and outcomes as generative mechanisms. Applying Moore's (1993) ecosystem lifecycle model, we developed a process model guiding SMEs to MSPs and discussed four propositions representing key activities supporting the transformation, reorganization, and emergence of the ecosystem. The results provide empirical evidence for the research on platform ecosystem emergence in B2B value chain networks. Hereby, we contribute to the call for further understanding of how B2B MSPs foster the redesign of value chains and B2B relationships between supply chain actors to enable the implementation of more sustainable business practices.

Appraising the Transformation and Future of Digital Multisided Platforms–A Bibliometric Analysis and Systematic Literature Review

Appraising the Transformation and Future of Digital Multisided Platforms–A Bibliometric Analysis and Systematic Literature Review

What Drives Emerging Products Adoption Intention? Comparing Strategic Entrepreneurship Outcome of Leading Digital Multi-Sided Platform Startups

What Drives Emerging Products Adoption Intention? Comparing Strategic Entrepreneurship Outcome of Leading Digital Multi-Sided Platform Startups

Enhancing resilience in digital multi-sided platform start-ups: An exploration of entrepreneurial logic and open innovation strategies

Enhancing resilience in digital multi-sided platform start-ups: An exploration of entrepreneurial logic and open innovation strategies

Mobile Money as a Stepping Stone to Financial Inclusion: How Digital Multisided Platforms Fill Institutional Voids

The literature on institutional voids examines how intermediaries, such as business groups and business incubators, address such voids in emerging economies. However, it remains unclear whether and how digital multisided platforms fill these voids given their unique features. This study focuses on mobile money platforms, which allow users without bank accounts or credit cards to perform financial transactions. We propose that these platforms fill institutional voids in three ways by (i) enabling data-based certification, (ii) providing unified access to distributed services, and (iii) scaling through network effects to reach previously excluded market participants. We argue that these novel mechanisms enable mobile money platforms to expand credit access to end users from formal financial institutions and thereby act as stepping stones to financial inclusion. Our analysis is based on a difference-in-difference design that leverages regulatory changes that allowed nonbanks to operate as mobile money operators and data from a representative random sample of 151,771 individuals in 78 countries. We supplement our quantitative analysis with rich, hand-collected qualitative evidence to illustrate the mechanisms underlying our findings. Funding: Financial support from the Wharton School of the University of Pennsylvania. Supplemental Material: The online appendix is available at https://doi.org/10.1287/orsc.2022.16562 .

B2B service sales on a digital multi-sided platform: Transformation from value chains to value networks

Business-to-business (B2B) service suppliers mobilize a platform approach to enhance their competitive advantage, service selling, and long-term relationships. These emerging platforms in established value chains have been insufficiently studied on a strategic level, especially regarding value orchestration. The aim of this article is to examine how digital multi-sided platforms (DMSPs) change platform owners' value chains toward joint value creation from a sales approach, including sales strategy, sales structure, and customer relationships. Our longitudinal multiple case study was conducted on four platform owners adopting a DMSP as part of their service selling. The findings show how the transition from value chain toward value orchestration in a network shifts the platform owner's focus to develop a common sales strategy with strategic network actors. The restructuring of sales with platform resources allows platform owners to manage larger networks with fewer resources and utilize enhanced interaction to create commitment in network relationships. We put forward three propositions and a framework to illustrate the interdependence of the value chain changes under examination. Additionally, this study offers various managerial implications for companies when utilizing platforms and provides avenues for further research.

Leveraging Social Network Utilization to Attain Competitive Advantage in Digital Multi-Sided Platforms

With the rapid growth of information technology, various business models that harness it for value creation and value capture have emerged. Unlike traditional software businesses that focus solely on selling software or its usage, these business models also involve the digitalization of conventional business processes. Firms adopting the digital multi-sided platform business model often serve as intermediaries, disrupting established businesses in the process (Kazan et al., 2014). They leverage their network resources as suppliers and connect them with customers (Hagiu & Wright, 2015). Ultimately, economic value for these firms is generated through transactions between suppliers and customers. They benefit as traffic providers, creating value for both suppliers and customers.

The influence of sustainability and digitalisation on business model innovation: The case of a multi-sided platform for food surplus redistribution

While digital multi-sided platforms have been primarily investigated from a technical or economic perspective, the evolution of their business models over time and the significance of social and environmental sustainability for their success received relatively less attention. Through a longitudinal case study on the evolution of a digital platform for food surplus redistribution, we analyse how the business model of a multi-sided platform evolved to balance and integrate the objectives of economic viability with social and environmental sustainability goals. Data were collected through interviews with the platform stakeholders and then coded following the Gioia methodology. By adopting the lens of sociotechnical theory, we develop a set of four propositions to provide a generalisation of our findings to the broader literature on digital multi-sided platforms. Based on the results, we argue that the sustainable business model innovation process of a digital multi-sided platform must consider the mutual influence between business model innovation, sustainability dimensions internal to the business model, and the leverage of opportunities offered by digital technologies. Eventually, we underline the fundamental role of the platform leader in guiding such evolutionary process and its ability to generate benefits for all stakeholders through both sustainability and digitalisation levers.

The digital entrepreneurial ecosystem in the European Union: evidence from the digital platform economy index

ABSTRACT Digital platforms play a central role in the development of the Digital Entrepreneurial Ecosystem (DEE). The growing body of research addressing the issue of imbalances in DEEs has raised the challenge of how to recommend policies specifically designed to overcome the causes of such imbalances. This paper explores the issue of platformization in three developed and high-income countries in the European Union: Germany, France and Austria. The framework and empirical measurement of the Digital Platform Economy (DPE) Index are used to analyze the state of DEE in these three countries, identify the most prominent weaknesses that could be barriers, and propose policy recommendations to overcome these barriers and promote the development of DEE. The results of the three-step investigation present the current state of DEE in each country and find that similar constraining elements in the Digital Multi-Sided Platforms of the three countries have the most potential to systemically disrupt the DEE balance. Tailor-made policies with a holistic approach are recommended to address these constraining elements and target overall DEE growth. The results of this study are expected to motivate future research highlighting the issues surrounding multi-sided platform markets in the context of digital economic development in the European Union.

Value creation in the 4IR

Value creation in the 4IR is customer-centric, interactive and hyper-personalised. Real-time consumer brand experiences, interactions and relations can be transformed into quantifiable data that can be monitored and tracked (‘datafication’). This study theorises that platform ecosystems, including millennials, converge on digital multisided platforms (MSPs), which are sociotechnical constructs that foment and generate significant value for platform owners and users. As value creation has risen as a digital economy business imperative, and a subject for academic research, the importance of millennials to brands warrants further investigation. This study aims to show how the interplay of social relations between millennials and brands, along with technology, are used to create value from the millennials’ perspective. To this end, it uses a consumer-dominant logic to explain and predict novel connections between key value creation constructs by millennial prosumers, including sole-creation, co-creation, collaboration, value destruction, value depreciation and value co-destruction. It presents three propositions that reimagine fit-for-purpose brands as interoperable constructs which exhibit complementarity, as well as the social dynamics of millennial interaction on digital MSPs. Findings indicate a cyclical value-interdependent relational system between millennials and brands, where millennial interaction leads to the creation or destruction of value. It also demonstrates how brands and platform owners can collaborate with millennials as an important and technologically savvy generation to co-create, capture and communicate value on digital MSPs.

Does effectuation make innovative digital multi-sided platform startups? An investigation of entrepreneurial behavior in platform-based open innovation

PurposeThis research investigates the nature of regulatory-focused effectuation (as the basis of entrepreneurial behavior) in absorptive capacity development for open innovation implementation, the role of crowds or communities management practices in the effectuation-based open innovation process, and open innovation performance as the output of the open innovation process in digital multi-sided platform (MSP) startups context.Design/methodology/approachIn order to verify the hypothesis, the researcher conducts a quantitative study that is based on a self-administered questionnaire and employs the PLS-SEM approach. The sample comprises of 70 Indonesian digital MSP businesses that have been operational for at least three years and have used open innovation approaches with their audiences, communities or complementors.FindingsThe research findings imply that there is a connection between promotion-focused effectuation and the open innovation process. This connection is particularly strong when it comes to the incorporation of absorptive capacity and crowds or communities management practices. On the other hand, prevention-focused effectuation shows insignificant effect toward open innovation process in digital MSP startups context.Research limitations/implicationsThe research findings imply that with limited resources and experiences, young entrepreneurs can still implement open innovation strategy for their digital MSP platform through effectuation principles that leverage the external resources from digital platform ecosystem members.Practical implicationsIn digital MSP startups context that perform promotion-based effectuation principles, innovation performance can be achieved by analyzing new insight, transforming the existing activities with the new insight, creating new offering afterward, as well as strengthening crowds or communities management practices through co-creation activities with platform ecosystem members that may lead into new business model.Originality/valueThe originality of this work is to make a contribution to the literature on strategic entrepreneurship by describing the phenomena of the paradox of resource-based theory; adopting open innovation strategy under constrained initial resources and capabilities scenario.

Digitalization of Knowledge Development in the Media Industry

Disruption in the global media and publishing industry is prevalent due to digitalization and new business models. The Scandinavian media market have already for a decade experienced disruptive technology and digital changes. The old highly profitable two-sided business model of both selling newspapers and adds has evaporated. Remaining is a freemium or even worse – a free content and a small margin from selling online advertisements. To compensate for revenue reduction the media organizations digitalize, and consequently have made a lot of media workers redundant. To create competitive advantage in this digital landscape, the players in the media industry needs to utilize big data analytics to make better decisions and to learn. It requires media organizations to gather, process, and act on a lot of information by combining digital multisided platforms. To know customer preferences and behavior there is a strong need to analyze, learn and explore rich information sources. They also need to be better at knowledge management to transform insight from data to organizational changes. To date there is limited empirical research detailing this learning process involving big data analytics and knowledge management. We offer insight from a case study of one of Norway’s larger publishing houses, with ownership in several newspapers and online media platforms. The case study was conducted during 2021 and is based on 10 different interviews with newspaper editors, journalists, commercial managers, and business analysts. Learning is an essential part of developing dynamic capabilities and this study is built on frameworks developed on knowledge development by applying the 4Iorganizational learning framework as an analytical lens. Our findings reveal important triggers and barriers for use of digital analytical tools and organizational learning processes. Especially intuiting, by providing more granularity to this dimension of the 4I framework corresponding better to the contemporary digitalized organizational reality. From this in-depth study of big data we gain insight into organizational learning from the intuition process. What triggers information retrieval can be categorized in three different areas: Strategic, Development and Cooperative aspects. In terms of strategic, availability of analytical tools is a crucial factor for a data-driven publishing business. From a development perspective, hypothesis-testing, developing new business models and new services is the core of big data analytics. The last dimension identified is cooperation as it is easier to find a common ground and direction for the organization. Big data analytics creates a coordination element in the organization. Although big data is a frequent business concept, relatively few articles address the challenges of using business analytical tools for understanding how organizations convert knowledge and learn and from big data.

Strategic entrepreneurship for achieving customers repurchase intention amidst pandemic COVID-19 on digital multi-sided platform: A case of Traveloka

The aim of this study is to understand a strategic entrepreneurship on digital multi-sided platform, Traveloka. The variables use is customer service, public service ads, brand image, trust, and repurchase intention. A 110 data collected using Google Form with purposive sampling technique and analyzed using PLS-SEM. The result shows that customer service has a direct and indirect influence through trust on the repurchase intention. Whereas public service ads have no direct and indirect influence on repurchase intention. Trust fully mediates brand image on repurchase intention. This paper contributes to the current understanding of attitudes in the tourism industry within the pandemic period, especially relating to the customer repurchasing behavior towards the online travel agent. The study proved that strategic entrepreneurship is essential to survive in a volatile environment for superior performance.

The Concept of Digital Entrepreneurial Ecosystem for SMEs in North Sulawesi, Indonesia

The digital economy comes with a sloping topography, is inclusive, and offers equal opportunities. This characteristic has the concept of competition which becomes the spirit of the industry that is easily lifted by SMEs players and Start-Ups who prioritize collaboration and synergy. Therefore, to face the challenges as well as opportunities that come simultaneously brought about by the presence of the digital economy and the pandemic situation, it is very important for SMEs to understand the environmental conditions and existing ecosystems, where a digital-based entrepreneurial ecosystem is something that is mandatory for the existence of SMEs. A new platform-based ecosystem framework, also known as the Digital Entrepreneurial Ecosystem (DEE) is proposed which integrates two separate but related ecosystem literature, namely the digital ecosystem and the entrepreneurial ecosystem. This new framework places platform-based ecosystems within the broader context of users, agents, infrastructure and institutions, so that two biotic entities (users and agents) drive individual agency, while two abiotic components (digital technology and digital institutions) make up the external environment. The purpose of writing this article is to get an overview of the concept of the Digital Entrepreneurial Ecosystem (DEE) by using a literature study research method. This article will be built and constructed based on empirical research that has been done, mapping articles and related studies to be able to provide an overview of the DEE concept for SMEs in North Sulawesi Province, Indonesia. The management of four sub-indexes of DEE, namely Digital Technology Infrastructure, Digital User Citizenship, Digital Multi-sided Platform, and Digital Technology Entrepreneurship, is the key to improving the SMEs in North Sulawesi, Indonesia.

Examining the effect of radical innovation and incremental innovation on leading e-commerce startups by using expectation confirmation model

The purpose of this study is to compare the effect of strategic entrepreneurship through different innovation approach between two leading digital multi-sided platform (MSP) e-commerce startups, Bukalapak, that use incremental innovation approach, and Shopee that use radical innovation approach to face the business challenge during Covid-19 pandemic. Using structural equation modeling (SEM) with the partial least squares method, the researchers use an extended expectation confirmation model (ECM) from a customer point of view to analyze the effect of the innovation efforts. A questionnaire was distributed to people who purchased a Bukalapak or Shopee online shopping application during the covid pandemic with the purposive sampling method. Finally, the analysis was performed with a total of 300 samples from Bukalapak and Shopee users. The results show that confirmation positively impacts perceived enjoyment, satisfaction, and customer engagement in both Bukalapak and Shopee cases. The results also show that perceived enjoyment and satisfaction engagement positively impact continuance intention as the manifestation of innovation. However, in the Bukalapak case that performs incremental innovation, the customer engagement is insignificant on continuance intention, while it is significant in the Shopee case that performs radical innovation. This study suggests enabling the customers to engage more in an e-commerce platform through a radical innovation approach by providing services beyond e-commerce scope (ex: mini-game, gamification activities, etc.) will likely lead to favorable responses and lasting relationships.

The value of system dynamics' diagrams for business model innovation

PurposeSystem dynamics (SD) is emerging as a powerful approach to understand, analyse, simulate and predict complex and dynamic business processes. In particular, it is true in the process of business model innovation (BMI) and not only as a computational approach. Due to the visual and diagrammatic tools employed by SD, innovation managers overcome humans' mental limitations and improve knowledge management in the BMI. This paper discloses the value of SD's visual tools, i.e. causal loop diagrams and stock and flow diagrams, to contribute to the “Knowldege Visualization” research line, and promote the application of SD as a powerful approach to support decisions in BMI.Design/methodology/approachGiven the explorative nature and the “how” question driving the research, the methodology involved is a single, holistic case study. In particular, the case is about a business model (BM) diversification, in which an information and communication technology service provider has added to its existing business model a new BM based on a digital multi-sided platform, for passengers transportation.FindingsThe diagrammatic tools of SD, that is causal loop diagrams and stock and flow diagrams, allowed entrepreneurs to overcome the complexity of the business parameters concurring in the design of the BM.Originality/valueThe value of this research is in the exploratory approach and in the originality of the perspective by which SD is analysed: the visual knowledge perspective.

Impact of digital multi-sided platforms on firm survival in retail

This paper explores firm survival in Russian retail industry in cases of digital multi-sided platforms penetration such as aggregator Yandex.Market, marketplace Wildberries, electronic store Ozon and classified-ad service Avito. The panel data set of 130 thousand firms was analyzed using two methods: non-parametric Kaplan—Meier estimator and semi-parametric Cox proportional hazards model with time dependent covariates. Kaplan—Meier estimator calculates the survival function for censored data. Cox proportional hazards model examines the effect of platform penetration on hazard rates of differently sized firms in various industry spheres. Platforms-aggregators Yandex.Market and Wildberries have a strong positive impact on firm survival while platformsdisruptors Ozon and Avito increase likelihood of firm failure. The main results of platform influence in various industry spheres are as follows: the aggregator of price offers has a more positive impact on segments with high information asymmetry; and firms specialized on Wildberries key product categories enjoy lower hazard ratios of bankruptcy or liquidation. These hypotheses are not supported for Ozon and Avito platforms.

Noisebnb: An Empirical Analysis of Home Sharing Platforms and Noise Complaints

Digital multisided platforms and their societal implications are increasingly attracting attention from scholars. In this prior work, the predominant focus has been on platform participants, with little consideration given other market actors who coexist with the platform, but do not participate in it directly. In this study, we investigate one aspect of the changing economy subject to considerable theoretical ambiguity: the effects of peer-to-peer home sharing on noise complaints, a growing problem associated with urban living. Leveraging the phased expansion of home sharing platform Airbnb into different locations at different times, and a differences-in-differences approach, we find that the entry of Airbnb is associated with a significant decrease in the rate at which city residents file residential noise complaints. This is striking, given the assumption made by academic literature, industry and government reports, and the popular press that externalities will be negative. This significant decrease is intensified further in locations where a material number of tourist attractions exists, suggesting the effect is driven by limited physical occupancy of residential housing. Corroborating this finding, we observe a significant increase in street noise following the entry of Airbnb, indicating that noise moves out of residential space and into streets where tourist attractions mostly take place.

The Processes Behind Pivots: Behavioral Perspectives on Entrepreneurial Change and Adaptation

Strategic change and adaptation play critical roles in young ventures’ success as they can result in better competitive strategies, or even a strategic pivot for the focal firm - i.e., a change in its products, markets, technologies, or business models that leads to a strategic reorientation. A limited but growing body of research in entrepreneurship focuses on new venture adaptation and has explored the antecedents of strategic adaptation as explained by industry structures, characteristics of firm founders and updating of their beliefs and mental models. However, surprisingly few studies explore whether firm founding characteristics or vision and passion, impact subsequent strategic choices, or how information screening and processing lead to entrepreneurial change and pivoting. Using a behavioral lens to examine entrepreneurial adaptation, the studies presented in our symposium explore the processes behind strategic pivots and how founder as well as firm founding characteristics interplay with decision-maker's mental models and information screening lead to entrepreneurial change and adaptation. Pioneering Digital MultiSided Platforms:Founding Characteristics, Key Strategic Choices and Survival Presenter: Audra Wormald; Robert H. Smith School of Business, U. of Maryland Presenter: Rajshree Agarwal; U. of Maryland Presenter: Serguey Braguinsky; U. of Maryland Presenter: Sonali Shah; U. of Illinois at Urbana-Champaign How do Women-led Entrepreneurial Firms Manage Change? Pivoting Among Female Entrepreneurs Presenter: Chiara Spina; INSEAD Presenter: Arianna Mastrippolito; Boston Consulting Group Not All Those Who Wander Are Lost: The Interplay of Mental models and Strategic Action Over Time Presenter: Douglas Hannah; Boston U. Questrom School of Business Presenter: Andrea Caldwell Marquez; U. of Texas At San Antonio Presenter: Timothy Ott; U. of North Carolina, Chapel Hill Living Your Passion and Embracing Change? The Impact of Mental Models on Entrepreneurial Adaptation Presenter: Anshuman Sinha; U. of California, Irvine How Do Entrepreneurs Learn Effective Resource Mobilization Actions Presenter: Benjamin L. Hallen; U. of Washington, Seattle Presenter: Suresh B Kotha; U. of Washington, Seattle Presenter: Alex Michael Murray; U. of Oregon