Dynamic platform strategies in an interconnected ecosystem: Navigating standards and complements in the emerging smart home ecosystem

Whereas prior platform research has mostly assumed standardized interfaces that are platform-specific, we examine how platform strategies based on third-party standards have become prevalent in a nascent ecosystem. Based on a longitudinal analysis of 97 smart home platforms, we analyze the value creation and capture benefits of four platform modes defined by two dimensions: the source of complements (first- or third-party complements) and the standardized interfaces used to connect these complements (first- or third-party standards). Our analysis demonstrates a trend from closed strategies (only first-party complements based on first-party standards) towards strategies that (also) rely on third-party standards. We find that startups and diversifying entrants make different strategic choices at entry and that firms increasingly combine platform modes over time to leverage their distinct value creation and capture benefits. Our findings contribute insights into the ecosystem conditions and pre-entry capabilities of firms under which strategies relying on third-party standards become viable and how this contributes to the proliferation of standards, platforms, and strategies in an ecosystem. We also theorize the time-dependent strategic choices of entrants navigating a nascent ecosystem and the complex complementary and competitive relations that emerge in an ecosystem with interconnected platforms as a result.