“I am inevitability myself”: how do ecosystems appear and what can we expect from them
When you start to review the sources, it becomes immediately obvious: even in the field of IT-specialists there were different and very contradictory ideas about the essence of ecosystems. We studied this topic in detail from practical necessity – some time ago our company began to develop in the direction of greater interconnectedness and breadth of market coverage. To build your own long-term strategy, it was necessary to reduce and systematize what is said about ecosystems, identify and evaluate the basic concepts and understand how the way for medium-sized technology companies looks in this new model. Below we share the results of this work and the conclusions that we made for ourselves.
The general definition of an ecosystem usually sounds something like this: it is a set of products that are interconnected with each other at the technology level to provide additional benefits to the user. It defines three parameters of an ecosystem that, in our experience, no one disputes:
- The presence of several services in its composition
- The presence of a certain number of connections between them.
- Beneficial effect on user experience
Outside this list, disagreements and conflicts of terminology begin. How many companies should be involved in building an ecosystem? Are all its members equal? What kind of benefits can they give to the client? How is the process of its origin and expansion? Based on these questions, we have identified our own four concepts, representing radically different models of creating “connectedness” between a group of products, which is called an ecosystem. Let's look at (and draw) each of them.
Insularity model
When the rapid acceleration of digital business transformation was just beginning, we often encountered the idea of an internal, closed ecosystem for each individual enterprise. When services are transferred to a virtual environment, it becomes easy to connect with each other, to build a barrier-free space in which the user is easy to work. There is no need to go far for examples: the Apple system most clearly illustrates this principle of universal accessibility. All information about the client, from the authentication data to the action history, which can be used to calculate preferences, is available to every link in the network. At the same time, the offered services are so diverse and tailored to the user's needs that the need to attract third-party products that would violate this perfect synergy does not often occur to him.
Now we are inclined to consider this viewpoint obsolete (by the way, and it has become less frequent to speak out). She suggests doing the right things – eliminating unnecessary steps from processes, making maximum use of user data – but in current realities this is not enough. Companies that are significantly inferior to Apple in scale cannot afford a strategy of complete isolation, or at least rely on the fact that it will give them a competitive advantage in the market. Today, a full-fledged ecosystem should be built on external relations.
Globalization model
So, we need external relations, and numerous. How to collect so many partnerships? Many will answer: you need a powerful center around which satellite companies will gather. And this is logical: if there is an initiative on the part of a major player, building a network of partnerships is easy. But the result of such a scheme becomes a structure with a specific form and internal dynamics.
Today, we all have already heard about the platform-monsters who are able, it seems, everything – they represent the logical result of development on the model of globalization. Collecting small companies under their patronage, a huge corporation gradually increases its influence and becomes a “face” in various business areas, while other brands are lost in its shadow. Suffice it to recall, the Chinese We-Chat application, which brings together dozens of businesses from the most diverse fields under one interface, allowing the user to call a taxi in one breath, order food, sign up at a hairdresser and buy medicines.
From this example, it is easy to derive a general principle: when the popularity of a centralized platform reaches a certain level, partnership with it becomes voluntary-compulsory for small and medium businesses to find a comparable audience elsewhere is unrealistic, and discourage it from an application that clearly dominates the market, even less real. Not surprisingly, the prospect of development on such a model often causes concern and rejection among independent developers and small studios. It is almost impossible to take an active position and work with the audience directly, and possible financial prospects look ambiguous.
Will such giant platforms emerge and develop? Most likely, yes, although perhaps not of such overwhelming proportions (in order to capture such a significant market share, at least some prerequisites are necessary in its structure). But limiting your understanding of ecosystems only to them, without considering a less radical alternative, is an extremely pessimistic view of things.
Specialization Model
This is perhaps the most controversial of all the types we have identified. It closely adjoins the collaboration model, but, in our opinion, it has several significant differences. The model of specialization is also designed for small and medium-sized businesses, also calls not to lock on its own resources, but to benefit from partner projects, but it implies a limited and not very flexible approach to their selection.
We can talk about this scheme when the company integrates some kind of ready-made third-party solution that allows the product to work better, primarily from a technical point of view. Often such decisions concern security or data storage issues. It is also possible to rank the simplest messengers with some caution, but this is already a “gray zone” at the junction with the collaboration – integration with developed systems like Trello or Slack can be considered connection to a full-fledged ecosystem. We called this scheme the model of specialization, since the company actually delegates the filling of certain gaps in the product functionality to a third party.
Strictly speaking, this corresponds to our initial definition of an ecosystem: a complex structure of several services that improves life for users (it would be worse if they risked their data or did not have the opportunity to contact the company online). But this type of cooperation does not sufficiently enrich the user experience: from the client’s point of view, the interaction is conducted with one service (even if several auxiliary are “invested” in it) and satisfies one need, albeit more effectively. Thus, like the model of insularity, the model of specialization offers, in general, a reasonable idea of outsourcing individual components of a product, but it is not enough to conceive of the concept of building proper ecosystems.
Collaboration Model
Let's say the developer of the application for tracking car spending has entered into an agreement with the bank to integrate the database with credit offers. So far this is the usual single experience of cooperation. This has improved for the users: now, working on one task (budgeting), they can immediately close another, thematically close need (search for additional funds). Then the same developer embedded another third-party service in the application to notify car owners about prices and promotions for the services he needs in the workshop. At the same time, his partner, the owner of the service center, began to cooperate with the car dealership. If you look at the whole set of links, a complex network of “linked” services begins to emerge, hitting which a person can solve most of the problems arising in the process of buying and maintaining a machine – in other words, still a small ecosystem with good potential.
Unlike the globalization model, where centripetal force acts – an influential driver that connects new and new participants to the system through itself, the collaboration model is made up of complex chains of cross-cooperation between partners. In such systems, the links are equal by default and the number of links for each one depends only on the team’s activity and the specifics of the service. We came to the conclusion that it is in this form that the concept of an ecosystem finds the most complete and healthy expression.
What distinguishes collaborative ecosystems?
- They are a combination of several types of services. At the same time, services can relate to one industry or to different ones. However, if a conditional ecosystem combines partners that offer virtually the same set of services, then it is more expedient to speak of a platform aggregator.
- They have a complex system of connections. The presence of a central link, which is usually called an ecosystem driver, is possible, but if other participants in the system are isolated from each other, in our opinion, the potential of the system is not properly implemented. The more connections – the more points of growth are fixed and opened.
- They give a synergistic effect, that is, the very situation when the whole turns out to be more than the sum of the components. Users are able to solve several problems at once or close several needs through a single entry point. At the same time, it should be emphasized that the most successful ecosystems are proactive and flexible: they do not just place options in plain sight and hope for interest, but draw attention to them when they are needed.
- They (as follows from the previous paragraph) stimulate the mutually beneficial exchange of user data, which allows both parties to more subtly understand what the client wants at each moment and what it makes sense to offer him.
- They greatly simplify the technical implementation of any affiliate programs: personal discounts and special conditions of service for “common” users, combined loyalty programs.
- They have an internal impulse to grow — at least from a certain stage of development. A solid user database, a total audience and experience of successful integration through the analysis of points of contact are things that are attractive to many companies. As we have seen from our own experience, after several successful integration cases to the ecosystem, a steady interest begins to form. However, this growth has a limit – collaborative systems are developing organically, without seeking to monopolize the market and not “crushing” individual business for themselves.
It is obvious that at this stage it is hardly possible to predict with 100% accuracy which type of ecosystems will be most in demand. There is always a chance that all types will continue parallel, with varying degrees of success, coexistence, or we are waiting for other, fundamentally new models.
And yet, in our opinion, the collaboration model is closest to defining the essence of a natural ecosystem, where “each part of it increases the chances of survival due to communication with the rest of the ecosystem and, at the same time, the survival of the ecosystem increases with the number of living organisms ”and, therefore, has a good chance of success.
As mentioned above, the presented concept is only our vision of the current situation. We will be glad to hear the opinions and predictions of readers on this topic in the comments.
