Abstract:
Multisided platforms have emerged as an important organizational form and industrial business model, transforming the economy into a platform economy. The logics of how managers can grow and scale platform-based offerings is qualitatively different than what was prevalent when the modern industrial firm scaled during the second and third industrial revolutions. This paper investigates how two platform companies in B2B markets scale their platform offering to users. We find that the type of platform, whether it is an innovation platform or transaction platform, involves different network effects. We expose that innovation platforms need direct orchestration due to a lack of network effects, whereas transaction platforms follow a market logic which makes it easier to reach network effects without direct interference by management.
