Digital entrepreneurs face the liability of newness, like any other entrepreneur. However, this liability of newness is manifested differently: it is mediated by an artefact, in this case a platform. This paper examines how a digital entrepreneur mediated by a platform can build legitimacy, something hitherto thought to be embedded within a social relationship (that is, one that a digital platform may be unable to have). Based on a qualitative research design, we develop the concept of "designed legitimacy", and we point to how trust may not be enough to overcome the liability of newness. Rather, legitimacy is needed to attract users and resources, and thus for growth and success. We further highlight the means through which a platform may come to be seen as legitimate, namely by designing with legitimacy in mind: by using symbols in design, asymmetric legitimacy building, and sequential two-stage legitimacy building. We end the paper with propositions for further study and the implications of this research for digital entrepreneurship and platforms.
This paper delves into the question: How does an entrepreneur commercialising an open source technology (an "open entrepreneur") respond when an underlying infrastructure that is maintained by a distributed and heterogeneous community become stigmatised, particularly when the source of the stigma is unclear? Research has found that, when faced with stigma, the most effective and robust strategy for established nondigital firms is to try to and create a distance from it. Open entrepreneurs with different ideologies would likely benefit from similar actions; however, the interdependencies created when they rely upon a digital infrastructure may make this strategy impossible. Given the tensions between ideological heterogeneity and a shared infrastructure, how-and whydo open entrepreneurs respond to stigma? This paper extends existing literature on stigma by developing a model of ideologically mediated responses to stigma by open entrepreneurs through an inductive study based upon interviews, archival, and forum data. We further contribute to extant literature on open entrepreneurship by proposing a model of ideologically mediated responses to stigma, which is grounded in group identity theory. We also build on digital infrastructure literature by proposing the concept of digital infrastructure anchoring. Lastly, we show how ideological heterogeneity leads to business model heterogeneity among open entrepreneurs and discuss the practical implications of this research.
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