Digital platforms have become central to the modern economy, transforming industries and reshaping consumer behaviors. Despite having some of the highest levels of software funding per capita, a developed startup ecosystem, and a booming software industry, there have not been many success stories of digital platforms in the Nordic region. Also, regarding literature, Nordic digital platforms and their challenges to growth have not been extensively studied.
In this thesis, we investigate the main growth challenges affecting the growth of Nordic digital platform startups. Our literature review aims to explore the general growth challenges of startups and the ecosystem in the Nordics, define the concept of digital platforms, and examine their specific value creation and challenges. Based on earlier literature, we apply a theory-based conceptual framework for our research problem. The empirical part of the thesis is conducted through a survey and interviews with Nordic digital platform startups to analyze the obstacles and challenges digital platform startups face.
With our empirical analysis, we find Nordic digital platform startups especially face market and financial-related challenges with customer acquisition and fundraising being the most concerning ones. We believe that fundraising, in particular, influences several of the other challenges perceived by the startups. Furthermore, we identified multiple digital platform-specific challenges, mostly related to market, such as achieving critical mass by simultaneously attracting users to multiple sides of the platform and managing network effects efficiently. We also examined factors of the Nordic startup ecosystem on the growth of the startups, discovering that regulatory challenges, particularly GDPR compliance and bureaucracy, are seen as barriers to growth. Our research also indicates that smaller startups perceive financial-related challenges as more pressing than larger startups, whereas more matured digital platforms startups find market-related challenges more hindering.
