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of this particular type of business model. By occupying a mediating role in a multi-sidedmarket environment, the platformsmentioned reduce transaction costs for supplyanddemand, simplify theoccurrenceofdirect interactions, and thusbind bothmarket sides to their own infrastructure. The economicpower of digital giants such asAmazonandApple stands for platformsuccess that drivespractical interest in this model from different industries. But for startups and traditional companies (incumbents), setting up a platform business also seems desirable. According to Gründerszene (2018), five of the eleven fastest-growing startups in Germany operatedamulti-sidedplatformbusinessmodel in2018.Althoughdigital platforms holdhighgrowthandearningspotential causedby itsmediatingcharacter, the setup phase is particularly challenging. This is so because instead of one stakeholder group, with suppliers and buyers, two or more groups are to be addressed. How- ever, this is not unusual for firms that have supplier networks or network-based value chains.Thedistinctive aspect of platformbusinessmodels lies in thedemand for an ecosystem of direct transactions between the actors involved, which grows through network effects, without taking on the steering role, e.g., of an original equipmentmanufacturer (OEM) in the automotive supply chain.Howdifficult it is todevelopaviablebusinessmodel even inadvancedstagesofbusiness activitydue to themechanismsof themulti-sidedmarket is shown, for example, byUber’shigh loss statement ofmore than 2.5 billion dollars in 2019, 10 years after the company was founded.Operating in theon-demandmobilitymarket,Uber is still looking for approaches to keep drivers and customers on its own platform, to integrate them into related ecosystems such as public transport, to leverage the regionally created added value beyond the regions, and to compile its operations into sustainable profits.This special breedof aplatformbusinessmodel entailsmanychallenges for digital entrepreneurs to develop andvalidate their platformbusinessmodel.Ghezzi (2019)highlights thatmostdigital startupsuse the leanstartupapproach in theearly phases of their existence. However, Ghezzi (2019) also points out that the same digital startups struggle to define proper tests and to design appropriateminimum viable although having a validated toolset at hand. In this chapter, we align a structured process to validate/invalidate different facets of a business model with the unique characteristics of a platform business model in order to help digital entrepreneurswhendeveloping andvalidating a platformbusinessmodel.Webase our thoughts on the developments in the previous chapter ofGöcke andWeninger (2020)with regard to thedevelopment andvalidationprocessofnewventure ideas. 2 Background 2.1 PlatformBusinessModels The concept of a platformhas come a longway frombeing a rather fuzzy concept that is sometimes understood as making companies more efficient through lever- aging economies of scale and scope to the understanding of platform business 88 L. Göcke and P.Meier
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Digital Entrepreneurship Impact on Business and Society
Title
Digital Entrepreneurship
Subtitle
Impact on Business and Society
Authors
Mariusz Soltanifar
Mathew Hughes
Lutz Göcke
Publisher
Springer Verlag
Location
Cham
Date
2021
Language
English
License
CC BY 4.0
ISBN
978-3-030-53914-6
Size
16.0 x 24.0 cm
Pages
340
Keywords
Entrepreneurship, IT in Business, Innovation/Technology Management, Business and Management, Open Access, Digital transformation and entrepreneurship, ICT based business models
Category
International
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