Designed entrepreneurial legitimacy: the case of a Swedish crowdfunding platform

Abstract

Digital entrepreneurs face the liability of newness, like any other entrepreneur. However, this liability of newness is manifested differently: it is mediated by an artefact, in this case a platform. This paper examines how a digital entrepreneur mediated by a platform can build legitimacy, something hitherto thought to be embedded within a social relationship (that is, one that a digital platform may be unable to have). Based on a qualitative research design, we develop the concept of “designed legitimacy”, and we point to how trust may not be enough to overcome the liability of newness. Rather, legitimacy is needed to attract users and resources, and thus for growth and success. We further highlight the means through which a platform may come to be seen as legitimate, namely by designing with legitimacy in mind: by using symbols in design, asymmetric legitimacy building, and sequential two-stage legitimacy building. We end the paper with propositions for further study and the implications of this research for digital entrepreneurship and platforms.

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