Entrepreneurial dynamics in two-sided platforms: the influence of sides in the case of Friendz

Abstract

Purpose: Two or multi-sided platforms - defined as those companies that aim to connect two or more groups of customers leveraging the opportunities provided by indirect network externalities – got massive attention from both scholars and practitioners over the last decade. Entrepreneurship scholars mainly focused on the platform's ability to enable entrepreneurial ventures for the complementors' side, exploring the network-centric view. This study aims to expand it by exploring the broader influence that sides can have on the platform provider's entrepreneurial decisions over time, during the evolution of the two-sided platform. Design/methodology/approach: The study is based on a longitudinal single case study developed over five years. The research presents the born and evolution of Friendz, an Italian two-sided platform. Findings: The research presents a four-phases evolution process that shows how the entrepreneurs may first leverage an existing platform to develop a new venture and then develop his/her own two-sided platform. In this latter phase, the findings show how the sides may actually influence the platform provider's entrepreneurial decisions, both in terms of value proposition design, but also regarding the creation of new ventures. Research limitations/implications: The study contributes to the two-sided platform literature highlighting new evolutionary paths that expand current literature and highlight the doubling platform approach. Moreover, it contributes to the entrepreneurship literature offering a novel perspective on the entrepreneurial dynamics in two-sided platforms by re-balancing the power between the platform provider and the sides within the double network-centric view. Practical implications: From a practitioners' perspective, this study offers an evolutionary path and specific tactics related to the evolution of an entrepreneurial venture based on a two-sided platforms that may inspire entrepreneurs working on two-sided platforms on how to use existing platforms and on the management of sides and the value propositions used to target them. Originality/value: This study takes a novel perspective at the intersection between platforms and entrepreneurship literature streams, exploring the power that sides have over the platform provider in shaping the platform's entrepreneurial evolution. In doing so, it proposes a double network view on two-sided platforms and highlights three network-related tensions that can guide the evolution of the two-sided platforms.