Digital platform ventures face unique challenges that amplify their risk of failure, particularly in highly regulated sectors like healthcare. While entrepreneurship and information systems (IS) research often explore the successes of platform ventures, their failures, especially in early stages, remain underexplored. Our ethnographic study investigates two early-stage digital platform ventures in the German healthcare sector, tracking their development over almost three years to uncover the dynamics of failure and its implications for learning and survival. We identify two critical dimensions of failure: Impact level, which measures the severity of consequences for the venture, and Learning potential, which captures the value of insights gained. These dimensions frame a typology of failure incidents: Nuisance, Treasure, Blow, and Beacon, that shapes our understanding of how failure transitions from a learning opportunity to a critical threat. Our findings highlight the interplay between internal limitations, external shocks, and regulatory constraints, offering insights for entrepreneurs navigating failure in highly regulated environments. By extending perspectives from IS and entrepreneurship literature, this study advances theoretical understanding of failure in digital ventures and provides practical implications for fostering resilience and transforming setbacks into opportunities for growth.
