fecycle stages into two: The formative years when entrants try new ideas, and the mature period with a standardized product. These two periods are characterized by a positive and negative net entry, respectively. They find that a larger firm startup size correlates positively with its survival probability in an uncertain environment - the formative years of an industry. However, in the mature period there seems to be no relationship between firm size and survival. This suggests that in a certain environment and with a standardized technology, small startup firms may overcome the disadvantages of their size by a niche strategy. It is thought that a firm may gain competitive advantage over other firms by either choosing a price leadership or a specialization strategy: A firm may try to produce a mass product at a price lower than that of other firms, it may provide something unique, or it may try to focus on a niche market (see Porter 1985). An empirical study shows the actual strategies of firms operating in the OSS/BSS industry sectors include all the above mentioned strategies (Frank et al. 2007). Dinlersoz and Hernández-Murillo (2005) consider three phases in an industry's lifecycle: The initial phase where many firms enter the industry, the second phase where the number of firms declines sharply, and the third phase with a stable number of surviving and successful firms. They illustrate this lifecycle with the development in the number of FM radio stations, and subsequently study the evolution of retail e-commerce. They note that the shakeout lasted only for a few months in the internet industry, whereas the usual average in manufacturing industries is several years or even decades. Easy access to the industry also caused a much more rapid initial phase of entry. They also conclude that an Internet retailer dominating one product category seems to be more capable of expanding also into other product categories. The above theories and studies illustrate the evolution of the supply side. The supply and demand of