The Evolution of a Sharing Platform into a Sustainable Business

A number of sharing economy start-ups have taken both digital and physical product markets by storm. These start-ups operate on two-sided platforms and enable sharing of physical products or services based on physical assets. Interestingly, they are subject to both the dynamics of the digital world (i.e., network effects), and the constraints of the physical world (i.e., issues of accountability when physical property is destroyed). We investigate how Airbnb, a sharing platform, evolve into a sustainable business with an in-depth case analysis based on data retrieved from a number of blogs providing information about Airbnb's actions. Our analysis with insights from platform economics and information infrastructures depicts two phases in the evolution process: creating the user base and augmenting the platform. With the two complementary theoretical perspectives we can offer a deeper understanding of the evolution of sharing platforms into sustainable and competitive businesses.