Role of Digital Platforms in Scaling Startups

Abstract

Digital platforms have transformed entrepreneurial landscapes globally by enabling startups to scale rapidly, access global markets, optimize costs, and leverage network effects. This paper investigates the multifaceted role of digital platforms in the growth and scaling of startups. Through a systematic review of academic literature, industry reports, and recent empirical studies, the paper analyses how digital marketplaces, platform ecosystems, and enabling technologies (e.g., AI, ecosystem orchestration, matchmaking) empower startups — especially resource-constrained firms — to overcome traditional barriers like market access, capital, infrastructure, and operational scalability. A conceptual framework is proposed that links digital platform adoption, resource enabling, network effects, and startup performance outcomes. The study highlights key benefits (market reach, cost-effectiveness, flexibility, resource access), mechanisms (two-sided markets, network effects, platform ecosystems), as well as challenges (digital divide, platform dependence, data privacy, regulatory uncertainty). Managerial and policy implications are discussed. The findings underscore that digital platforms are not merely channels but strategic enablers for startup scaling; however, sustainable scaling demands conscious governance, capability building, and balanced platform strategy.