L07 A: Huang, J.C., Henfridsson, O., Liu, M.J. and Newell, S., 2017. Growing on Steroids: Rapidly Scaling the User Base of Digital Ventures Through Digital Innovation.

Question 1

Rapid scaling

Answer 1

significant increase in the user base between two points in time starting-point

Question 2

Contingent mechanisms by digital ventures innovate for rapid scaling:

Answer 2

(1) Data-driven operation
(2) Instant release
(3) Swift transformation

Question 3

Data-driven operation:

Answer 3

Identification of new innovation opportunities from analyzing significant volumes of data enabled by malleability of digital technology and separation of contents and medium.

• User profiling: the utilization of user data to identify and explore uncharted areas, such as new user segments, so as to identify innovation opportunities.
• Decision hedging: the activities by which digital ventures use established and novel data forms for assessing the risk of its innovation.
• Fine-grained monitoring: the activities that managers enact to comprehend innovation performance by collecting, analyzing, and evaluating usage data such as growth rates, use patterns, new applications, cash flow, and systems performance.

Question 4

Instant release

Answer 4

Instant release: mechanism by which digital ventures minimize the time gap between service idea and deployment by concurrently running user-response service trialing and modification enabled by separation between function and form (modularity) and low marginal costs of content allows firms to react to a slowing adoption speed.

• Launching: the activities that digital ventures undertake to prioritize, consolidate, and channel internal resources toward fueling the launch of innovation.
• Concurrent trialing: the activities of testing different services and service versions in parallel to enable multidimensional user feedback.
• Reactive modification: the immediate changes undertaken by a digital venture to an established service in view of users’ reactions and feedback.

Question 5

Swift transformation

Answer 5

mechanism by which digital technology is effortlessly contextualized to create new value-in-use and new venturing identity leverages versatility of digital resources, firms can quickly enter new industries or redefine who they are and what they do.

• Contextualizing core digital technology: The activities of rethinking a core in-house digital technology for a new business context.
• (Re)defining identity: Digital venture’s recurring definition of what it does and what it is.

Question 6

Why is this study important?

Answer 6

We believe that these findings have important implications for
practitioners who face the challenge of managing the evolution of digital infrastructures. Understanding the difference between the two configurations is seminal for the choice of management strategy

Question 7

Managerial implications:

Answer 7

• Firms in the digital era view the user base as a precondition for creating a customer base.
• Slow-downs in user growth may serve as a starting-point for reinvention; managers should put in place capabilities to detect changes in growth rate.
• Firms engaged in digital innovation are in useful position to explore uncharted territory by synthesizing user data in conjunction with other data sources for managing market uncertainty and mitigating risk.
• Firms invest considerable amount of effort to grow user base, but also need to generate “stickiness” to ensure that users perceive the need to reuse the service through activities as launching, concurrent trailing and reactive modifications.
• Digital ventures need to be capable of transforming themselves, and of constructing a venturing identity that matches their service offering (organization malleability).