Gans, Scott and Stern’s (2023) Entrepreneurial Strategy Compass and Strategy Development for Market Entry into Existing Digital Platform Ecosystems Dominated by Incumbent Players

The main theoretical purpose of my thesis was to understand the limitations of Gans, Scott and Stern’s (2023) Entrepreneurial Strategy Compass for firms starting within platform ecosystems and to extend that framework to enable strategy development for such firms. The practical relevance of this thesis is to use the Entrepreneurial Strategy Compass to devise a suitable strategy for bringing an innovative business idea – namely a virtual musical instrument – to the market.

This is higly relevant as I believe that this strategy compass ignores strategy development for market entry into existing platform ecosystems dominated by incumbent players. And as businesses are increasingly launched within existing digital platform ecosystems (Amazon Market Place, App Stores, UBER), this is a critical gap in the literature.

In my thesis, I have set out to show that not every platform ecosystem offers the kind of network effect that is so powerful. Furthermore, it is suggested that another layer is added to the Entrepreneurial Strategy Compass’ disruption strategy so that Gans, Scott and Stern’s (2023) framework is extended for firms who wish to sell through digital platform ecosystems. In addition, a self-assessment form has been devised to analyse whether selling through a digital platform ecosystem can be expected to be beneficial for startup businesses.   

Implications for practitioners are that the term platform ecosystems can mean several things. The term can be understood in a technical sense but it can also be understood as something that brings together people who can co-operate, exchange goods and thus, create value. Network effects can be very powerful and it has to be assessed by startup companies whether it is beneficial for them to sell through platform ecosystems. In addition, I have suggested that another layer is added to the Entrepreneurial Strategy Compass to undertand the channel of selling through digital platform ecosystems better and I have also created a self-assessment list based on ideas by mostly Parker, Van Astyne and Choudary (2016) that could assist startup companies in doing just that.

In my thesis, several approaches have been used: (1) autoethnographic research focussing on founder wishes and beliefs (Chang, 2016); (2) the scientific method when hypotheses are tested; and (3) experimental testing of a prototype. Testing of a prototype was achieved by presenting participants with a minimal viable product so that they could engage with it, which is proposed by Ries (2011:93ff). The idea was to engage with potential customers through an iterative build-measure-learn loop.