EXPRESS: Platform Complementors’ Diversification Strategies and the Role of Venture Capital
Platform complementors diversify across categories and platforms as escape routes, shaped by VC alignment.
Summary
The study uses data on iOS and Android app developers and their venture capital funding to examine how platform complementors diversify. It treats diversification across product categories and across platforms as an escape route from the pressures of a single platform, and finds that the way developers diversify depends on how closely their venture capital investors are aligned with them. The paper links the strategy of complementors on platforms to the nature of their financial backers.
Editor's opinion
A complementor's dependence on a platform can be reduced by diversifying across categories or across platforms, and the path a developer takes is shaped by its investors. Founders and platform owners should read diversification as a response to platform power that is partly steered by the capital behind the developer.
Key concepts
complementors · multihoming · diversification · venture capital · platform power