Digital Product Platforms: A Global Startup's Home-Field Advantage?
39 Pages Posted: 12 Oct 2023 Last revised: 14 Nov 2023
Date Written: October 7, 2023
Product platforms have emerged as vehicles for startups to reach and learn from users from around the world. Do global startups with greater prior exposure to users outside of their headquarters region expand their user base more after featuring on these platforms than do local ones? This paper tests this question using data from a digital product platform where IT startups from around the world launch their product to get early users. It shows that the user effects of platforms accrue more to local rather than to global startups. While global startups do not see meaningful increases in users after posting, local startups see a roughly one-fifth boost in page visits, driven by foreign region users. These local startups see an increase in their share of foreign users by twelve percentage points and update their websites to orient toward these audiences. Together, these analyses suggest that product platforms enable local startups to learn about foreign demand, revealing how product platforms can help startups explore new international orientations, rather than entrenching pre-existing ones.
Keywords: Entrepreneurial strategy, global strategy, digital platforms, technology entrepreneurship
JEL Classification: M10, M13, M16
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