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Development and Validation of Platform Businesses in Digital Entrepreneurship

Author: Göcke, L., & Meier, P.
Published in: M. Soltanifar, M. Hughes, & L. Göcke (Eds.), Digital Entrepreneurship – Impact on Business and Society (pp. 87-102). Cham: Springer.
Year: 2020
Type: Book contributions and chapters
DOI: 10.1007/978-3-030-53914-6

Platform business models grow in relevance in nearly every industry by an optimization of transaction costs or a significant increase in innovativeness. Many entrepreneurs choose platform business models to create and capture value. Although the benefits of platform business models demonstrably have immense growth potential, these business models are also accompanied by unique challenges for startups in their early stages of development. In this chapter, we aim to discuss the specific challenges that digital entrepreneurs face when validating their platform business model concept. We also develop a processual model, based on the venture pyramid (discussed in Chap.4 of this book) to validate the critical assumptions of platform business models. Based on three case studies of early-stage startups, we shed light on the dynamics of testing platform business models and discuss different approaches to develop a minimum viable platform.

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