Seeding for quality of platform complements: evidence from Amazon’s Alexa ecosystem

An important objective for digital platform governance is to ensure the creation of high-quality complements. For nascent platforms, complements are typically the main force in attracting early adopters and, consequently, further improving platform’s attractiveness to potential complementors. In this research-in-progress paper, we study seeding – direct financial support to selected complements by the platform owner – as an indirect governance mechanism in motivating the complement quality improvement in general. The dataset consists of 499 connected home complements on Amazon’s Alexa platform that were released during the first three years after the platform launch. The preliminary findings reveal that complements launched after platform owner’s seeding actions generally show better quality. Such a quality improvement effect seems to be reinforced if the platform owner can conduct repetitive seeding on the same complement. However, the effectiveness of repetitive seeding may vary depending on the investment and the maturity of the target complement’s business

Comparing platform owners' early and late entry into complementary markets

Research on platform owners’ entry into complementary markets points in divergent directions. One strand of the literature reports a squeeze on post-entry complementor profits due to increased competition, while another strand observes positive effects as increased customer attention and innovation benefit the complementary market as a whole. In this research note, we seek to transcend these conflicting views by comparing the effects of the early and late timing of platform owners’ entry. We apply a difference-in-differences design to explore the drivers and effects of the timing of platform owners' entry using data from three entries that Amazon made into its Alexa voice assistant’s complementary markets. Our findings suggest that early entry is driven by the motivation to boost the overall value creation of the complementary market, whereas late entry is driven by the motivation to capture value already created in a key complementary market. Importantly, our findings suggest that early entry, contrary to late entry, creates substantial consumer attention that benefits complementors that offer specialized functionality. In addition, they also suggest that complementors with more experience are more likely to benefit from the increased consumer attention. We contribute to platform research by showing that the timing of the platform owner’s entry matters in a way that potentially can reconcile conflicting findings regarding the consequences of platform owners' entry into complementary markets. </p

Comparing platform owners' early and late entry into complementary markets

Research on platform owners’ entry into complementary markets points in divergent directions. One strand of the literature reports a squeeze on post-entry complementor profits due to increased competition, while another strand observes positive effects as increased customer attention and innovation benefit the complementary market as a whole. In this research note, we seek to transcend these conflicting views by comparing the effects of the early and late timing of platform owners’ entry. We apply a difference-in-differences design to explore the drivers and effects of the timing of platform owners' entry using data from three entries that Amazon made into its Alexa voice assistant’s complementary markets. Our findings suggest that early entry is driven by the motivation to boost the overall value creation of the complementary market, whereas late entry is driven by the motivation to capture value already created in a key complementary market. Importantly, our findings suggest that early entry, contrary to late entry, creates substantial consumer attention that benefits complementors that offer specialized functionality. In addition, they also suggest that complementors with more experience are more likely to benefit from the increased consumer attention. We contribute to platform research by showing that the timing of the platform owner’s entry matters in a way that potentially can reconcile conflicting findings regarding the consequences of platform owners' entry into complementary markets. </p