The business eco-system until quite recently refered to the eco-system of companies, goods, and services. The business eco-system concept was originally developed by Moore when he suggested “that a company should be viewed not as a member of a single industry but as part of a business eco-system that crosses a variety of industries”.
As digitization and the Internet of Things (IoT) make homes, phones, and cars increasingly “smart,” companies and organizations are beginning to work together in order to create interconnected offerings that are proving more valuable than a single company’s isolated product or service. These digital ecosystems are often orchestrated by market share leaders and are quickly reshaping a wide array of industries.
In my experience companies still don’t fully grasp what makes a particular digital eco-system successful or how to go about creating a new one. And to be quite honest, measuring eco-system success is not always straight-forward. Whether you aspire orchestrate your own digital eco-system and/or are looking to choose the right ecosystem to join I offer five factors common to successful digital ecosystems.
- A Fast Start Is Not Enough
Because many digital eco-systems are also platform businesses, the emphasis is on being first, or at least early. The common wisdom is that scale begets interest, which begets scale, leading to winner-takes-all markets. But my experience is that long-term success depends less on being the first mover and more on taking the time to craft the right strategy and value proposition and to attract the right partners
- A Strong User Base
While being early may not be a must, having a robust user base certainly is. Ifound that, in most cases, the more successful eco-systems were orchestrated by an established market share leader. These leaders were best positioned to attract partners with the right skills and funding.
- A Deep Bench of Partners
To build an eco-system you need to bring in expertise from other industries. The more partners an eco-system has, and the more industries they come from, the better that eco-system will fare.
- A Strong Footprint
Another characteristic of success is a solid scope or reach. Successful digital-age partnerships require remote collaboration across many touch points; geographic, language, cultural and organizational boundaries. Individual company strategy plays a part in what type of partnership mix is appropriate, however.
- A Robust Collaboration Capability
The orchestrator of a strong eco-system must manage dozens of partners, across multiple industries and potentially countries, and different types of relationships (for example, contractual agreements, platform partnerships, and minority shares in venture capital investments). Selecting and managing the right mix of collaborations is critical for success. Arrangements like these give an eco/system more flexibility and the ability to experiment as it responds to changing customer preferences, new technologies, emerging competitive threats, and regulatory changes
I will help you understand how digital platforms and eco-systems are created, nurtured, managed and governed, and the intelligence gathered will be the base for a new business strategy.