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 EducatorsPurchase

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.

About the Author

Photo
Andy Wu
Assistant Professor of Business Administration
Strategy

View Profile »
View Publications »

 
Campus Map
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→ Map & Directions
Copyright © President & Fellows of Harvard College