Empirical Essays on Crowd-based Digital Platforms and Product Innovation Performance

Product innovation is essential to the long-term success of many firms but extraordinarily difficult to achieve. Digital platforms have created an avenue for firms to address this challenge by connecting directly with crowds of potential customers at large scale. However, it remains an open question whether digital platforms are effective at tapping into crowd’s needs information in a way that ensures product innovation success on a broad market. Thus, the objective of this dissertation is to verify two propositions: (1) crowds provide useful knowledge that potentially generates value in the market and (2) crowd-based digital innovation platforms function as an effective aggregator of crowd’s such knowledge to generate useful market information. In this dissertation, I approach the study of this phenomenon in two essays. The first essay seeks to explore to what extent crowd-based digital innovation platforms enable firms to gauge demand preferences and to discover unmet needs. I theorize how crowd-generated knowledge is aggregated into two theoretically important aspects of ideas to create value in the market. The second essay focuses on the value proposition of digital platforms for new ventures aiming to introduce product innovations to the mass market. By drawing upon two alternative views of crowdfunders, I theoretically and empirically examine to what extent crowdfunding platforms are a robust mechanism for aggregating information to determine the performance of new venture product innovation in the mass market. I expect this dissertation to make contributions to the innovation literature by shifting the emphasis to the value proposition of crowd-generated knowledge. This dissertation also contributes to the digital platform literature by shedding light on information role of digital platforms in facilitating firms’ product innovation success