In Search of Status : The Impact of Niche Players’ Status on Performance in Platform Ecosystems

Small firms can vastly benefit from participating in ecosystems – specifically from the shared technological assets and market opportunities offered by the platform. Yet, while aligning to the ecosystem rules, each member must gain and maintain some distinctiveness to capture these benefits. We examine two common patterns through which niche players compete and survive in a platform ecosystem by achieving status and distinct position. We theorize that achieving high status in a single niche of product categories and a single ecosystem together diminishes niche players’ financial performance over time. Similarly, high status in multiple ecosystems and multiple niches, at the same time, adversely impacts the financial performance over time. Analyzing a panel data of app developers in smartphone ecosystems, we find supportive evidence for our hypotheses. This paper contributes to the nascent stream of research that investigates issued faced by ecosystem members, rather than focusing on the ecosystem hub’s strategies