Nascent Platform Strategy: Overcoming the Chicken-or-Egg Dilemma

Andy  Wu; David R. Clough; Sasha  Kaletsky

Technical Note | HBS Case Collection | May 2019

Nascent Platform Strategy: Overcoming the Chicken-or-Egg Dilemma

by Andy Wu, David R. Clough and Sasha Kaletsky

Abstract

This note provides a framework for addressing the classic chicken-or-egg dilemma facing entrepreneurs launching nascent multi-sided platforms. There are several conditions that lead to a difficult chicken-or-egg problem: strong network effects, high multi-homing costs, limited differentiation, and high other barriers to entry. To overcome this challenge and create competitive advantage by reaching critical scale in network size, there are three categories of solutions to the problem: increasing value, decreasing cost, or subsidizing value for the platform participants. For a multi-sided platform, there are also dynamic considerations for addressing whether to stage one side of the platform first or build both simultaneously.

Keywords: Multi-Sided Platforms; Strategy; Entrepreneurship; Market Entry and Exit; Problems and Challenges; Competitive Advantage;

Language: English

Format: Print

9 pages

Educators

Citation:

Wu, Andy, David R. Clough, and Sasha Kaletsky. "Nascent Platform Strategy: Overcoming the Chicken-or-Egg Dilemma." Harvard Business School Technical Note 719-507, May 2019.

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Nascent Platform Strategy: Overcoming the Chicken-or-Egg Dilemma

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