Page - 85 - in Digital Entrepreneurship - Impact on Business and Society

models that are characterized by amulti-sidedness of value creation (Gawer 2014). Airbnb, for example, needs to be attractive to guests (demand side), as well as to hosts (supply side). Facebook has developed a six-sided platform in the past with friends and businesses (each with roles as sender and receiver), as well as adver- tisers and app developers (Evanas and Schmalensee 2016). This fundamental characteristicofmulti-sidedness is critical to theunderstandingofplatformbusiness models (Evanas and Schmalensee 2016) and goes in hand with the dynamics of network effects (Shaprio andVarian 1999). These dynamics provoke chicken-egg problems as they require companies to establish a critical mass of users on a platform in order to unleash a virtuous cycle (Pan Fang et al. 2019). At the same time, network effects can lead to winner-takes-most/-all situations in which com- panies create a strong competitive advantage through the size of the network and a lock-in through theattractivenessofnetworkeffects tobothmarket sides (Cennamo 2019). The platform characteristics of multi-sidedness, the impact of network effects, aswell as theassociatedchicken-eggproblemand thewinner-takes-all logic play a particularly important role in the development and validation of digital platformsas the central topicof this chapter (Evans2003;Rochet andTirole2003). After a general introduction, these characteristics will be explained inmore detail and placed in the context of the platform framework. A common classification of digital platforms according to (Gawer 2014; Cusumano et al. 2019) describes transaction-oriented, innovation-oriented, and hybrid platforms.Transaction-oriented platforms, generally referred to as mar- ketplaces, offer the technical architecture to bring together supply-creating and supply-demanding actors in order to carry out transactions of different value units. Theplatform itself ismostlynot involved in individual transactionsbutonlycreates the framework through defined functions and mechanisms. The primary value proposition of this platform type is the facilitation of a simplifiedmatching of the mentioned actors under the premise of significantly reduced transaction costs. This means that the respective platform, through its role as a single point of contact, combines supply and demandmore efficiently as thiswould be possiblewithout a platform.Popular examples for companiesoperating transactionplatformsare eBay (used things), SoundCloud (audio files), or Deliveroo (food deliveries). Innovation-oriented platforms are understood as a basic architecture on which different actors come together to create new products and services (Gawer and Cusumano 2002; Parker et al. 2016). Examples are operating systems for personal computers andmobiledevices.MicrosoftWindowsstill functions as theunderlying innovation platform on which third parties develop a broad spectrum of different applications forpersonal computers.However, Internet browsersdrivenbyGoogle, which does not control a major PC operating system but a gradually dominant browser, are becoming increasingly important as an innovation platform for Web-based applications. A further increase in the importance ofWeb applications significantly threatens the supremacy of operating system providers—in this case, Microsoft—as an independent ecosystem develops around the browser as an innovationplatform. If companiesoperate acombinedor several closely interlinked transaction and innovation platforms, this is referred to as a hybrid platform. Development and Validation of Platform… 89