Page - 83 - in Digital Entrepreneurship - Impact on Business and Society

Development andValidation of PlatformBusinesses inDigital Entrepreneurship Lutz Göcke and PhilipMeier Abstract Platform business models grow in relevance in nearly every industry by an optimization of transaction costs or a significant increase in innovativeness. Many entrepreneurs choose platform business models to create and capture value. Although the benefits of platform business models demonstrably have immense growth potential, these business models are also accompanied by unique challenges for startups in their early stages of development. In this chapter,we aim to discuss the specific challenges that digital entrepreneurs face when validating their platform business model concept. We also develop a processual model, based on the venture pyramid (discussed in Chap. 4 of this book) tovalidate the critical assumptionsofplatformbusinessmodels.Basedon three case studies of early-stage startups, we shed light on the dynamics of testing platform businessmodels and discuss different approaches to develop a minimumviable platform. 1 Introduction In late 2018, six out of the ten most valuable companies based on market capi- talization run one or several platform business models (Handelsblatt, 2018). Examples such asAmazonMarketplace orAppleAppStore illustrate the character L. Göcke (&) Chair of DigitalManagement, NordhausenUniversity ofApplied Sciences, Nordhausen, Germany e-mail: lutz.goecke@hs-nordhausen.de P.Meier Alexander VonHumboldt Institute of Internet and Society, Berlin, Germany ©TheAuthor(s) 2021 M.Soltanifar et al. (eds.),DigitalEntrepreneurship, FutureofBusiness andFinance, https://doi.org/10.1007/978-3-030-53914-6_5 87