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Smart Timing for Smart Products? Complementor Multihoming in Nascent Platform Markets
Authors: Senem Aydin (Northeastern University, USA), Fernando Suarez (Northeastern University, USA), Yakov Bart (Northeastern University, USA), Dirk Libaers (University of South Florida)
Complementor multihoming is becoming pervasive in platform-mediated markets populated by multiple platforms. In a study of the nascent “smart home” industry, we use a novel dataset to examine complementor strategies regarding timing of entry and timing of multihoming, with their corresponding performance implications. We find that early entrants to a platform market multihome faster than later entrants. While early entrants achieve lower performance than later entrants, this negative performance effect is mitigated for complementors that multihome fast. This implies that multihoming is an effective hedging strategy for early entrants in multi-platform markets characterized by high uncertainty. Also, multihoming scope (number of platforms a complementor joins) is associated with higher complementor performance and shorter time to the next platform adoption.