The platforms’ DNA: drivers of value creation in digital two-sided platforms

ABSTRACT

With the advent of the digital economy, two-sided platforms have gained significant momentum over the last two decades. Contrary to traditional businesses, two-sided platforms do not have linear value creation; instead, they create value by enabling interactions or exchange between two different groups of customers. This configuration creates challenges as well as opportunities and calls for an in-depth investigation in the digital context. This research investigates how digital platforms create value in two-sided platforms.

The paper is based on a multiple-case study of four leading digital companies. The sampling is based on a theoretical and replication logic. Both primary and secondary sources are used for the research.

This paper indicates that the value created by those digital platforms is based not only on their ability to reduce transaction costs and resolve frictions between two sides, but also on four other drivers (trustworthy environment, data-driven expansions, personalised services, and engagement mechanisms). These drivers enhance and enrich the basic value proposition of matchmaking. The four drivers build upon one another, bringing together two matching value propositions and forming a structure that is represented as the two-sided DNA.

KEYWORDS:

• Two-sided platforms
• digital platforms
• two-sided market
• value creation
• value drivers
• business model

Acknowledgment

This paper is the final version of a research presented during the R&D Management Conference 2018 in Paris in July and during a research seminar at Trinity College in October 2018 (https://www.tcd.ie/business/news-events/research-seminars1718.php). We thank all the discussants of those presentations and the reviewers of this version for helping us in enhancing our research.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Daniel Trabucchi

Daniel Trabucchi is Assistant Professor at the School of Management, Politecnico di Milano, where he also serves as a senior researcher in the LEADIN’Lab, the Laboratory for LEAdership, Design and INnovation. He works on Innovation Management, with two main areas of research and teaching: platform thinking and the human side of innovation (with strong focuses on engagement and agile methods to make innovation happen, within the research platform IDeaLs). He co-founded Symplatform, the symposium on digital platforms that aims to foster a constructive discussions among scholars and practitioners.

His research has been published in peer-reviewed journals such as Journal of Product Innovation Management, Technological Forecasting and Social Change, Internet Research, Research-Technology Management, Creativity and Innovation Management, Technology Analysis and Strategic Management, and European Journal of Innovation Management; he is also a reviewer for many of these journals.

Laurent Muzellec

Laurent Muzellec is the founder and director of Trinity Centre for Digital Business and the MSc in Digital Marketing Strategy at Trinity Business School, Trinity College Dublin. His research interests pertain to the field of digital business model, electronic Word of Mouth, and brand management. His articles have appeared in several international publications including Industrial Marketing Management, Marketing Theory, the Journal of Advertising Research and the European Journal of Marketing. Laurent teaches marketing strategy and digital marketing at executive level (e.g. Executive MBA).

He co-founded Symplatform, the symposium on digital platforms that aims to foster a constructive discussions among scholars and practitioners.

His qualification includes a BA from Sciences-Po Bordeaux (F), a BA Information and Management from Napier University (UK), a MBA from Texas A&M International University and a PhD from UCD Smurfit School of Business.

Sébastien Ronteau

Sébastien Ronteau is Associate Professor of Entrepreneurship at Audencia Business School. His research interests focuses on Strategy, Entrepreneurship and Digital Startups with a closed look at Business Model dynamics and entrepreneurial practices. His academic work has appeared in French and international Journals such as ‘Finance, Contrôle, Stratégie’; ‘Revue Française de Gestion’; ‘Entrepreneurship and Regional Development’; ‘Industrial Marketing Management’ and ‘International Business Research’. He is also the co-author of the best seller ‘Business Model. Configuration et renouvellement’ published by Hachette Paris in 2011. He co-founded Symplatform, the symposium on digital platforms that aims to foster a constructive discussions among scholars and practitioners.

Tommaso Buganza

Tommaso Buganza is Associate Professor of Leadership and Innovation at the School of Management of Politecnico di Milano where he also is co-founder of LEADIN’Lab, the Laboratory for Leadership, Design and Innovation. He is a lecturer in Innovation Management and Project Management, responsible for the Project Management Academy and coordinator of the innovation and training area at MIP (Politecnico di Milano Graduate School of Business). He is scientific director of IDeaLs the global research platform of Politecnico di Milano that pioneers new ways to engage people to make innovation happen with companies. He co-founded Symplatform, the symposium on digital platforms that aims to foster a constructive discussions among scholars and practitioners. He is a member of the scientific committee of the International Product Development Management Conference EIASM-IPDMC. His research activity explores the intersection between technological innovation and leadership and has been published in peer-reviewed journals.