How has COVID-19 influenced changes in a platform business model of a startup? Alloy’s case study

Zuquetto, Rovian Dill; Molling, Graziela

doi:10.5902/1983465972335

Acessibilidade / Reportar erro

Brasil

Revista de Administração da UFSM

Español English

Brasil

Español English

sumário « anterior atual seguinte »

Sumário

Original Article • Rev. Adm. UFSM 16 (4) • 2023 • https://doi.org/10.5902/1983465972335 copy

How has COVID-19 influenced changes in a platform business model of a startup? Alloy’s case study

Como a COVID-19 influenciou mudanças em um modelo de negócios de plataforma de uma startup? Estudo de caso da Alloy

Authorship SCIMAGO INSTITUTIONS RANKINGS

ABSTRACT

Purpose – This study aims to identify the changes in a startup’s platform business model (PBM) due to COVID-19, considering the properties of value proposition, value creation, and value capture in three periods: Pre-COVID-19, During COVID-19 and almost Post-COVID-19.

Design/Methodology/Approach – This inductive qualitative research is based on a longitudinal and single case study of Alloy, a Brazilian startup that had to change its PBM due to the COVID-19 pandemic. Primary data was collected through interviews, complemented by secondary data such as documents and videos. Data collected refers to the period from August 2019 to July 2023. Data analysis was conducted following the content analysis approach.

Findings – Due to the COVID-19 scenario, Alloy had to change its PBM by modifying its value proposition, value creation, and value capture, moving the focus from a transaction platform to an innovation platform. While scalability decreased due to COVID-19, the PBM changes allowed Alloy to increase its network externalities, which can influence return to scale and bring it closer to success with PBM.

Research limitations/implications – As a limitation, this study focuses on a single case study. Although it is singular, new cases can help to support our findings.

Originality/Value – The originality of this study relies on being able to follow the steps of a startup with a PBM during the COVID-19 period. In complement, a conceptual model was developed to identify Alloy’s changes and opportunities to succeed with its PBM, which can be helpful for academics and practitioners.

Keywords:
Platform Business Model; COVID-19; Startup

Code	Interview Date	Duration (minutes)	Participants
E1	Dec 11th, 2020	48:20	Alloy’s CEO
E2	Dec 14th, 2020	44:49	Alloy’s Accelerator Manager
E3	Dec 15th, 2020	53:55	Alloy’s Mentor and Investor
E4	Dec 22nd, 2020	31:37	Alloy’s customer (a restaurant CEO); Seller side of a platform
E5	Jan 11th, 2021	62:30	Committee Meeting (E5a – Alloy CEO; E5b – Alloy CTO; E5c – Accelerator Manager; E5d – Mentor and Investor; and an E5e – investor from IT sector)
E6	Oct 19th, 2021	16:00	Investment group meeting (E6a – Alloy CEO; investors and accelerator managers)
E7*	Nov 5th, 2021	55:00	Alloy’s CEO
E8	Feb 1th, 2022	15:00	Investment group meeting (E6a – Alloy CEO; investors and accelerator managers)

PBM Property

Pre-COVID 19

During COVID-19

Almost Post-COVID-19

Opportunities to succeed as a PBM

VALUE PROPOSITION

- “Empower the local entrepreneur and their business”;

- Increase the success rates of SMEs, helping them to attract and retain customers;

Solution described as a marketing and loyalty automation for physical retailers;
- In the physical space, an userfriendly, intuitive solution to the buyers;
- Focus on the

repurchase.

- From the point of

view of Alloy, it is still the same, adding

a “delivery”

solution;

- Focus on the first

purchase as well (stated by E2); Cheapest options

than competitors with similar solutions.

Engagement and loyalty still is the main focus;
- Strategy of providing a “onestop- shop” solution

with a complete set of functionalities for the customer’s business, including integration with other

solutions – even

competitors;

Own food marketplace;

- Licensing solutions

through a Whitelabel model.

- Become a transaction platform (multisided market) and/or an innovation platform (allow third part complementarity).

PBM Property	Pre-COVID 19	During COVID-19	Almost Post-COVID-19	Almost Post-COVID-19
VALUE CREATION
Network externalities	(Low) - The focus was on increasing one side (sellers) and expecting, indirectly, to increase the other (buyers).	(Low and reduced) Loss of customers base due to COVID- 19; The focus was on increasing one side (sellers) and expecting, indirectly, to increase the other (buyers).	(from Low to Medium) - Focus is on increasing one side (sellers) and expect, indirectly, increasing the other (buyers); - New focus is to increase the base through licensing solutions, Whitelabel.	- Develop network externalities where an increase in the number of the multi-sides adds value to the platform.
Return to scale	(Medium to High) - They were working to achieve scalability since the implementation was less time- consuming.	(Low) - Scale potential reduced due to COVID-19; - Non-scalable yet; the business model required personalized implementation for each client.	(from Low to Medium) - Alloy found a possible PBM able to scale through the Whitelabel.	- Reduce the friction and costs to implement the solution.
Winner- take-all	- It did not reach this position, but there was no dominant player in the market.	- It did not reach this position, and there are several dominant players in the market.	- It did not reach this position, and there are several dominant players in the market.	- Connect previous and current VPs in a high-value offer and grow fast.
Multi- homing	- There were many options available for each solution.	- Delivered a highvalue solution that added more value than the competition.	- Delivering a highvalue solution that adds more value than the competition; - Identified the need to add more functionalities;	- Guarantee an offer hard to imitate.
Lock-in	- It was easy to change suppliers.	- Alloy increased change costs to prevent users from finding the same or higher value on other platforms.	- New functionalities planned will increase the costs of change or avoid the user from finding the same or higher value in other platforms.	- Increase the cost of change for customers and users.

PBM Property	Pre-COVID 19	During COVID-19	Almost Post-COVID-19	Almost Post-COVID-19
VALUE CAPTURE	- They were not able to evaluate since it was starting its business.	- “Delivery” solution was the primary value perceived; fidelity is behind; - Perceived by the customers (sellers) as cheap, fast, and providing a close and differentiated service; - Perceived by the buyers (according to the sellers) as not intuitive, not fast, and lack of payments options – impacting the sellers if the buyers do not use the platform.	- Third-party partnerships can promote scale and enable Alloy to focus on technology development to ensure more value capture for all participants.	- Find a balance between differentiated customer service and scalability; - Focus on the buyers’ value proposition and capture as well.

Universidade Federal de Santa Maria Avenida Roraima nº 1000, Prédio 74C, Sala 4210 - Cidade Universitária - Centro de Ciências Sociais e Humanas (CCSH) - Universidade Federal de Santa Maria (UFSM), Cep: 97105-900, Tel: +55 (55) 3220-9242 - Santa Maria - RS - Brazil
E-mail: rea@ufsm.br

Acompanhe os números deste periódico no seu leitor de RSS

[1] E-mail: roviandz@outlook.com