The Divergent Impact of Competition on Platforms
How competition affects contributions to crowdsourced platforms like OpenStreetMap
Platform Papers is a blog about platform competition and Big Tech. The blog is linked to platformpapers.com, an online repository that collects and organizes academic research on platform competition.
Written by Abhishek Nagaraj and Henning Piezunka.
In today’s digital landscape, platforms that rely on crowdsourced knowledge, such as Wikipedia, Yelp, and OpenStreetMap, are competing directly with traditional, professionally sourced platforms like the Encyclopedia Britannica, Guide Michelin, and Google Maps. While traditional platforms often employ experts to produce their content, crowdsourced platforms depend on volunteers who contribute based on their motivations and beliefs. But what happens when these two types of platforms compete with one another?
This question is at the heart of our recent research published in Strategy Science, which explores how competition from traditional platforms influences contributions to crowdsourced platforms. Our study suggests a fascinating, divergent effect: while existing contributors are often motivated to contribute more in the face of competition, the recruitment of new contributors becomes significantly more challenging.
Understanding the Divergent Effect
The key insight from our study is that competition affects different types of contributors in divergent ways. For those who were already contributing to a crowdsourced platform before the entry of a traditional competitor, competition acts as a motivator. These “pre-entry contributors” feel a strong attachment to the platform, often driven by ideological beliefs or a commitment to the platform’s mission. When faced with a competitor, these contributors tend to increase their activity, motivated to support and defend their chosen platform.
On the other hand, competition has a chilling effect on new contributors, reducing the number of individuals who begin contributing after a competitor enters the market. This reduction is primarily due to decreased awareness; new recruits are less likely to discover or become engaged with a crowdsourced platform when a traditional competitor is drawing attention away. For example, if a user becomes accustomed to using a traditional, widely advertised platform like Google Maps, they might never encounter or consider contributing to a crowdsourced alternative like OpenStreetMap.
OpenStreetMap vs. Google Maps
To test our theory, we examined the phased entry of Google Maps across different countries and its impact on OpenStreetMap, a crowdsourced mapping platform launched in 2004. OpenStreetMap’s global launch contrasted sharply with Google Maps’ gradual country-by-country entry starting in 2005. This staggered expansion provided a natural experiment to observe how competition affects crowdsourced contributions.
Our findings confirm the divergent effect: contributions from existing contributors increased, but new contributions from freshly recruited users dropped significantly. Specifically, in countries where Google Maps entered, pre-entry contributors were observed to increase their contributions showing a marked effort to bolster the platform they valued. Conversely, the entry of Google Maps resulted in a significant decline in contributions from new recruits, highlighting the challenges faced in attracting new volunteers when attention is diverted by a prominent competitor.
Ideological Attachment and Awareness
We delved into the mechanisms behind these effects and found that ideological attachment plays a key role for pre-entry contributors. Contributors with strong beliefs in open-source and crowdsourced principles are particularly motivated when ‘their’ platform faces competition. For instance, in countries with a higher number of GitHub contributions per capita or higher market share of the crowdsourced browser Mozilla Firefox, we observed a greater increase in contributions from existing contributors.
Conversely, awareness is the main barrier for new contributors. New recruits often start as consumers, and when competition draws potential users away, fewer people are exposed to the crowdsourced platform. As a result, the pool of potential new contributors shrinks, which diminishes the overall volume of contributions. Our research illustrates that this awareness gap is a critical challenge for crowdsourced platforms striving to grow their contributor base.
Implications for Crowdsourced Platforms and Beyond
These findings have significant implications for crowdsourced platforms and their management strategies. Understanding the divergent effects of competition can help platform managers develop targeted approaches to maintain and expand their contributor base. One possible strategy is to strengthen community engagement among existing contributors, leveraging their ideological commitment to create a more vibrant and active platform. Additionally, increasing visibility and awareness through marketing or partnerships could help mitigate the negative impact on recruiting new contributors.
“[C]ompanies like Google may find their current AI researchers more motivated to outperform competitors like OpenAI, but at the same time, they may struggle to attract new talent who are not already ideologically committed to the firm.”
The implications of our findings extend beyond digital platforms. This divergent effect can be observed in other competitive environments, such as organizations facing rival firms. For example, companies like Google may find their current AI researchers more motivated to outperform competitors like OpenAI, but at the same time, they may struggle to attract new talent who are not already ideologically committed to the firm.
This pattern is not limited to the tech industry. Nonprofits, open-source projects, and even political movements may see similar dynamics, where the presence of a strong competitor galvanizes existing members but makes it harder to bring new participants on board. This understanding can help organizations better strategize in the face of competitive pressures, focusing on solidifying the commitment of current members while finding innovative ways to attract new ones.
Conclusion
Our study highlights a crucial challenge for crowdsourced platforms: while competition can bolster the commitment of existing contributors, it also poses a significant hurdle in attracting new users. For managers and stakeholders of crowdsourced platforms, understanding these dynamics can help in strategizing ways to mitigate the impact of competition—whether through community building, enhancing awareness, or other means.
In essence, competition from traditional platforms may not spell doom for crowdsourced models, but it undoubtedly reshapes the landscape of contributions in complex and nuanced ways. By embracing this challenge and developing strategic responses, crowdsourced platforms can continue to thrive in an increasingly competitive digital environment.
This blog is based on Abhishek and Henning’s research, which is published in Strategy Science and is included in the Platform Papers references dashboard:
Nagaraj, A., & Piezunka, H. (2024). The Divergent Effect of Competition on Platforms: Deterring Recruits, Motivating Converts. Strategy Science, 9(3), 229-296.
Platform Papers is curated and maintained by Joost Rietveld.