Exploring the Entry Point for Growth Steps: A Real-time Case Study of the Platform Development Process

Abstract

Recent advances in information and communication technology have led to the rapid growth of platform businesses that provide a place for two or more sides (i.e., groups of participants), such as sellers and buyers, to interact and transact. This business has structural characteristics that are different from conventional businesses, and its development process is also considered unique. However, previous studies have mainly focused on established and successful platforms, and have not paid enough attention to the early stages of the process. As a result, scholars assumed that platforms would be built according to a blueprint that clearly stated which side and segment to approach. However, identifying and exploiting entrepreneurial opportunities is not a linear process and involves learning under uncertainty and trial and error. In light of the above, this study conducted a longitudinal case study to examine the process of defining the sides and segments approached by Company V, a startup that provides a platform to connect manga (cartoon) artists with readers and companies. Consequently, this study demonstrates that it is essential for platform startups to attract participants, and identify the optimal entry point for the company’s growth steps. In particular, when entering an industry such as the manga industry, where information technology is not widely used, it is possible to build a platform by leveraging technology in challenge areas, based on a deep understanding of the market structure and other companies’ trends. The study also suggests that it is effective to use the existing networks as a foothold, to identify on which side and segment to focus.