Managing the Size-Distinctiveness Trade-off: The Case of Platform Cooperatives
BIM Job Seminar - Platform organizations can choose between different competition logics: winner-takes-all logic, which prioritizes network size, and distinctiveness logic, prioritizing unique content, quality, or user experience. Because pursuing both size and distinctiveness simultaneously has been shown to represent a major ‘platform trap’, platforms face a strategic trade-off between quickly growing their network of users and complementors as opposed to carving a distinct positioning in the market. We argue that platform strategy is rooted in organizational identity and use this insight to examine how identity dynamics shape the ways in which platforms manage the trade-off between size and distinctiveness. We employ a multiple-case study of platform cooperatives – an organizational form that uniquely embodies this trade-off . We find that platform cooperatives go through three core phases: (1) enacting identity as a strategy for growth; (2) decoupling identity from strategy; and (3) growth-enabled coevolution of identity and strategy. Moving across these phases, we identify the underlying activities that platforms use to navigate what we termed as the ‘distinctiveness-size tension’. Overall, we contribute to the literature on multi-sided platforms, , the interface between platform strategy and organizational identity, as well as the broader body of work on the platform economy.