The power of two-sided platforms to disseminate resistant innovations

Purpose – Platforms have often been considered an excellent example of innovation with an incredibly fast diffusion rate due to network effects. Notwithstanding, in many cases, they match the definition of resistant innovations, requiring a significant change in the consumers’ behavior that may slow down the process of diffusion. How can network effects be leveraged to disseminate resistant innovation based on a platform structure? Design/methodology/approach – This research focuses on the car-sharing industry as a single case study, involving five different providers and two service aggregators operating in Milan, Italy. Findings – First, this research shows how direct network externalities on the providers’ side may play a vital role in the dissemination process, increasing the value perceived by the potential new entrants. Second, it shows how co-opetition dynamics, eventually encouraging multihoming phenomenon, may play – in the first phases of the diffusion process – a pivotal role to let the industry flourish. Research limitations/implications – This research contributes to the growing literature on platforms and two-sided platform showing how this model may be applied more broadly to network businesses to understand competitive dynamics. Practical implications – This study offers insights to managers and practitioners dealing with network services, showing the potential benefits of coopetitive strategies while facing the initial phases of the dissemination process. Originality/value – This paper gets together resistant innovation, two-sided platforms and network effects offering novel insights on the dynamics of network services – such as the car-sharing – while giving fresh insights taking the perspective of the service providers.