David Overshadows Goliath: Specializing In Generality For Internationalization In The Global Mobile Money Industry

Research Summary: We investigate the emergence of a global industry based on digital innovation by studying how the international expansion of pioneering firms relates to their characteristics and strategies for capability development and deployment. Using detailed archival data on mobile money, we classify pioneers that internationalize based on whether they were multinational diversifying entrants, developed country startups, or developing country startups. Our quantitative evidence suggests developing country startups that internationalize have the highest impact on the industry through subsequent platform launches. Digging deeper into the business histories of each firm, we uncover why: these startups "specialize in generality" by developing and deploying "bundled knowledge" capital consisting of technology, problem solving and alliance management capabilities, thereby offsetting their physical capital scale and scope disadvantages relative to multinational diversifying entrants.Managerial Summary: Our study demonstrates how pioneers in mobile money created and utilized capabilities for international expansion. We show that among pioneers who engaged in internationalization, developing country startups had a greater global footprint than both developed country startups and diversifying entrant multinationals, even though conventional wisdom might predict greater impact for the latter two types. We link such impact of developing country startups to their focus on developing "bundled knowledge" capital, consisting of technology, problem solving, and alliance management capabilities which they could leverage in multiple countries. Not only did these firms grow through collaboration, they created and democratized access to needed financial services worldwide.