http://ssrn.com/abstract= 1826702

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Let a Thousand Flowers Bloom? An Early Look at Large Numbers of Software 'Apps' Developers and Patterns of Innovation

Kevin J. Boudreau

London Business School

April 30, 2011

It is often presumed that bringing more members on board a multi-sided platform will stimulate value creation. Here I study the thousands of software producers building applications (“apps”) on leading handheld computer platforms (1999-2004). Consistent with past theory, I find a lock-step link between numbers of producers and varieties of software titles. The narrow, unchanging scope of producers and a series of other patterns are consistent with a pronounced role of specialization and heterogeneity of producers. I also find that while adding producers making different types of software stimulated investment incentives, consistent with network effects, adding producers making similar software crowded-out innovation incentives. The latter of these two effects dominates in this context. The patterns also indicate non-random generation and sorting of producers onto platforms, with later cohorts generating systematically less compelling software than earlier cohorts of entrants. Overall, added producers led innovation to become more dependent on population-level diversity, variation and experimentation - while drawing less on the heroic efforts and investments of any one individual innovator.

Number of Pages in PDF File: 35

Keywords: competition and innovation, multi-sided platforms, distributed and open innovation, network effects, software and digital innovation

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Date posted: May 1, 2011  

Suggested Citation

Boudreau, Kevin J., Let a Thousand Flowers Bloom? An Early Look at Large Numbers of Software 'Apps' Developers and Patterns of Innovation (April 30, 2011). Available at SSRN: http://ssrn.com/abstract=1826702 or http://dx.doi.org/10.2139/ssrn.1826702

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Kevin J. Boudreau (Contact Author)
London Business School ( email )
Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom
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References:  87
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