Business Model Innovation of Startups Developing Multisided Digital Platforms

Platforms are defined as multisided marketplaces with business models that enable producers and users to create value together by interacting with each other. In recent years, platforms have benefited from the advances of digitalization. Hence, digital platforms continue to triumph, and continue to be attractive for companies, also for startups. In this paper, we first explore the research of platforms compared to digital platforms. We then proceed to analyze digital platforms as business models, in the context of startups looking for business model innovation. Based on interviews conducted at a technology startup event in Finland, we analyzed how 34 startups viewed their business model innovations. Using the 10 sub-constructs from the business model innovation scale by Clauss in 2016, we found out that the idea of business model innovation resonated with startups, as all of them were able to identify the source of their business model innovation. Furthermore, the results indicated the complexity of business model innovation as 79 percent of the respondents explained it with more than one sub-construct. New technology/equipment, new processes and new customers and markets got the most mentions as sources of business model innovation. Overall, the emphasis at startups is on the value creation innovation, with new proposition innovation getting less, and value capture innovation even less emphasis as the source of business model innovation.