Fostering Network Effects : How to achieve user retention on multisided platforms

University essay from Luleå tekniska universitet/Institutionen för ekonomi, teknik och samhälle; Luleå tekniska universitet/Institutionen för ekonomi, teknik och samhälle

Abstract: Purpose – The purpose of this study is to increase the understanding of how multisided platforms (MSP) could retain different user groups on their platform. To fulfill the purpose, the following research questions (RQ) were derived: RQ 1: How could MSPs design their activities to retain users on the producer side(s)? and RQ 2: How could MSPs design their activities to retain users on the consumer side(s)? Method – This study was conducted as an abductive single case study based on a multisided platform developed within the health sector. In addition, complimentary interviews were conducted to validate and expand the result from the case study. In total, 15 interviews were conducted and analyzed through thematic analysis. Findings – The findings are presented in a framework showing what activities to conduct in certain stages of platform development and is divided between two distinct platform sides, producers and consumers. The different stages are relative to critical mass i.e. how many users the MSP has and shows which activities that is necessary in these stages. Theoretical implication and Practical implication – The study suggests activities necessary for retaining users on MSPs seen to certain stages of development. Additional contributions are (1) in the beginning, MSPs should initially focus on the platform side who provides the most viable product, (2) mass in users is a prerequisite for finding the right matches, and (3) “super-platforms” with many value offerings will be key for retaining users and long-term success. The practical implications are (1) which activities that are necessary on a certain side of the MSP, (2) guiding managers with which activities that are suitable in a certain stage of platform development, and (3) provide managers with the ability to plan future activities. Limitations and Future Research – This study is conducted in South-east Asia which implies that a similar study should be conducted in a western context. Furthermore, it is limited to a single-case study of an MSP, although there were exploratory and confirmative interviews with other companies. Future research should therefore include a multiple-case study to compare how different MSPs work with retention. Lastly, further studies into what critical mass is and how to estimate that, should be considered.

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