Publications
Abolfathi, N. (2025). Multihoming and single-homing complementors’ responses to intensified between-platform competition: Evidence from the YouTube–Twitch rivalry. Strategic Management Journal. 1–48.
This paper examines how heterogeneous YouTube content creators, specifically single-homing and multihoming channels, respond to a sudden increase in the exposure of the rival platform, Twitch. Contrary to expectations, I find that multihoming channels reduce their content creation efforts and underperform relative to single-homers. To make sense of these surprising results, I develop a formal model that characterizes the strategic behavior of different types of complementors operating across two platforms with varying levels of user exposure. The model offers a plausible explanation for the observed empirical patterns, suggesting that intensified competition between platforms, as a consequence of their changing exposure, disproportionately incentivizes single-homers to enhance platform value while discouraging multihomers from maintaining the same level of engagement.
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Finalist for Best Proposal Award for Rigor, Competitive Strategy IG, SMS Annual Conference, 2024.
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SMJ Version (open access)
Santamaria, S., Abolfathi, N., & Mahmood, I. P. (2024). Demand pull versus resource push approaches to entrepreneurship: A field experiment. Strategic Management Journal. 45(3), 564-587.
We compare the efficacy of two broad approaches to entrepreneurship training: a training prioritizing demand-side activities versus a training prioritizing resource-side activities. We do so by running a field experiment inside a 6-month entrepreneurship program involving 236 early-stage entrepreneurs. Inspired by our training, the first group invested more time interacting with potential customers and developing a deep understanding of customer needs and problems. The other group, in contrast, spent more time identifying and exploiting their core resources such as their network. Our results reveal that the training prioritizing demand-side activities is substantially more effective. At the end of the program, the group exposed to the demand-side training acquired more than twice the number of customers and generated revenues 65% higher than the other group.
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Best Paper Award, wISE Scholarship in Oceania (Co-organized by Strategic Management Division of AOM), 2023
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SMJ Version (open access)
Abolfathi, N., Fosfuri, A., & Santamaria, S. (2022).
Out of the trap: Conversion funnel business model, customer switching costs, and industry profitability. Strategic Management Journal, 43(9), 1872–1896.
Across many industries, firms employ a conversion funnel business model to attract customers with basic and affordable products, generate lock-in, and then sell them more advanced and expensive products. We argue that this business model, coupled with high customer switching costs, results in a market outcome characterized by aggressive pricing and reduced profits. A sudden reduction in customer switching costs disrupts the conversion funnel and can eventually increase industrywide prices and profitability, an outcome that contradicts conventional wisdom in strategy research. We develop a stylized model to formalize our ideas and provide supportive evidence using a difference-in-differences methodology with staggered treatment for a large, global sample of mobile telecommunications operators.
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Best Paper Prize Honorable Mention, SMS Conference 2021
Abolfathi, N., Santamaria, S., & Williams, C. (2021).
How does firm scope depend on customer switching costs? Evidence from mobile telecommunications markets. Management Science. 68(1): 316–332.
This paper examines the relative advantages of single-product and multiproduct firms following changes in customer switching costs. Whereas a single-product firm can closely tailor offerings to customers’ needs, a multiproduct firm can create value for customers in the form of flexibility, allowing them to change between product varieties as preferences evolve without needing to switch providers. We argue that this value-creation mechanism is more effective when customers face high switching costs and explore this prediction in the mobile telecommunications sector, using an exogenous policy change (mobile number portability) that suddenly decreases customer switching costs. Our results reveal that when customer switching costs fall, multiproduct firms see lower growth than single-product firms, and entry with a multiproduct offering becomes less frequent than before. The study highlights how customer switching costs can enable or inhibit choices of firm scope.
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Glueck Best Paper Award, Strategic Management Division, AOM Annual Conference 2020
Abolfathi, N., & Santamaria, S. (2020).
Dating disruption-How Tinder gamified an industry.
MIT Sloan Management Review, 61(3), 7-11.
An analysis of the U.S. mobile dating app industry from its inception in 2007 to its phenomenal shakeout in 2013 demonstrates that Tinder changed the game — quite literally. As in other cases of industry disruption, dating app upheaval illustrates that newcomers need to compete by transforming noncustomers into customers rather than challenging incumbents for the established mainstream market. Although emerging technologies may allow newcomers the opportunity to overthrow incumbent competitors, our research shows that altering the user experience for an overlooked market segment, not technology, is the key success driver for industry disruption.
Selected Working Papers
While extensive research has examined informal mentors in early-stage ventures, the role of formal advisors received less attention. We propose that formal advisors enhance startup credibility and increase fundraising chances through their public affiliations, serving a signaling function beyond traditional mentoring roles. Using a field experiment at an Asian startup pitch competition in which the presence of formal advisors was manipulated, we find support for our predictions. Formal advisor affiliations increase the likelihood of securing external funding, particularly when team quality signals are weak, though this effect is independent of marketplace signals, such as customer traction. Finally, the advisor’s signaling role is more pronounced among less experienced investors and in contexts with greater complexity and information asymmetry. In short, our study documents the conditional value of formal advisors, offering implications for how entrepreneurs can strategically leverage formally affiliated advisors.
A demand-side perspective on firm performance after new technology introduction: The role of customer complementary assets. (with Phene, A.)
Firms may fail to grow their customer base and enhance performance after new technology introduction due to customers’ lower value perception of the new technology. Integrating research on firm complementary assets with the demand-side literature, we propose that customers’ prior access to complementary assets allows firms to benefit after new technology introduction. We posit that a firm can increase customer value perceptions and achieve better performance by leveraging pre-existing intangible and tangible complementary assets owned by its customers that arise from their familiarity with similar technologies and access to supporting equipment, respectively. We test our ideas by considering the introduction of 4G technology in the telecommunications industry. Our findings highlight that firms need to proactively equip their customers with complementary assets well ahead of new technology introduction.
Niche expansion strategy: Explaining leadership change in the mobile dating app industry.
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We provide a theoretical framework highlighting when new platforms are able to displace incumbent platforms and become market leaders by identifying and expanding seemingly small niches. The framework is based on the idea that markets are composed of different niches (or segments) with heterogeneous intensity of network effects. Thus, selecting and targeting a niche with the strongest network effects can trump the dominant strategy suggested by extant literature –i.e., maximizing the number of users irrespective of their segments. For the empirical analysis, we build on a unique dataset of U.S. dating applications, where a new wave of entrants into the oligopolistic industry experienced enormous success, replacing incumbent platforms in a short window of time. We document how the success of the new entrants is explained by their focus on an overlooked niche, young adults, with a stronger network effect than the other segments.