Page - 96 - in Digital Entrepreneurship - Impact on Business and Society

seen in the development of PayPal,whichused the reach of eBay to build traction. Through active participation as buyers and sellers, PayPal employees actively convinced eBay users to use its service for financial processing during the trans- actions.Thereby,PayPalused thescaleofeBayand thevalue-addedof their service for eBay users as a leverage effect. 4 Practical Implications forDigital Entrepreneurs The development of a platform business brings unique challenges (e.g., multi- sidedness and chicken-eggproblem) for digital entrepreneurs.These challenges are contingent on the platform business model, but independent from the type of entrepreneurs, whether they are startup entrepreneurs or corporate entrepreneurs. We have adapted the venture pyramid to the characteristics of platformbusinesses and suggest to test the risky assumptions associated with multi-sidedness and network effects very early in the venturing process. For digital entrepreneurs, this means that a venture idea for a platformbusinessmodel needs to be tested for both sides in order to get insights on the fundamental dynamics of platform business models. We want to encourage digital entrepreneurs to walk the extra mile to validate the demand side, aswell as the supply side. It is tempting to focus onlyon thevalidationof thedemand sideof thebusinesswhen timeconstraints and limited resources accompany the entrepreneurial journey. But the exclusive validation of onesideof theplatformcomesathighcosts.Thedevelopmentofaminimumviable platform based on wild guesses for these characteristics is accompanied by great risks to the venture process. From the state of platform market fit on, digital entrepreneurs should not only validate their assumptions on the single-homing vs. multi-homing characteristics but also on the design of the platform control mech- anism in order to create and capture value. We see potential to conduct further researchon theventuringprocess for platformbusinessmodels, especially in terms of validation of risky business assumptions. References Adner, R. (2017). Ecosystem as structure: an actionable construct for strategy. Journal of Management, 43, 39–58. Blank, S.,&Dorf, B. (2012).The startup ownersmanual: The step-by-step guide for building a great company. K&SRanch. Bland, D. J., &Osterwalder, A. (2020). Testing Business Ideas.Wiley. CBInsights. (2018).The top20reasons startups fail. https://www.cbinsights.com/research/startup- failure-reasons-top/. RetrievedOctober 09, 2019. Cennamo, C. (2019). Competing in digital markets: A platform-based perspective. Academy of Management Perspectives. https://doi.org/10.5465/amp.2016.0048. Cennamo,C.,Ozalp,H.,&Kretschmer, T. (2018). Platformarchitecture and quality trade-offs of multihoming complements. Information Systems Research, 29(2), 461–478. 100 L. Göcke and P.Meier