Build an Ecosystem

When I migrated to my new blog, as per my initial post, I wasn’t able to easily/successfully bring past posts with me (still working on some options). Since then, I’ve received a number of comments and dozens of emails asking for a copy of a post I’d written previously about developing an ecosystem.  So I thought I’d re-publish that post, with some minor edits to take into account things that have transpired over the past 8 months since it was originally published.  So let’s dive right in….

When you look at nature and the environment, why is it so important to save an area of wetland?  Why is it important to save a type of wildlife?  The reason is balance.  An ecosystem is a delicately balanced environment.  If you are missing an animal, then other elements of the ecosystem suffer as well.  When there are gaps in the ecosystem, in short, it stops working.

This concept applies to business as well.  Why has Apple been successful?  Is it because the build top-notch quality products?  In part yes, but not entirely.  Is it because they deliver products that met the users’ needs better than any other product?  In part yes, but not entirely.  No, the real reason that Apple has been so successful is that their products and services are part of an ecosystem that they’ve developed.  Tied together beautifully, that ecosystem just works.  It is that element, that it just works, that really has been the reason Apple has been so successful.  It’s also the reason why other competing companies have failed to develop any type of Apple-product-killer.  As a competing company you can’t build a product that will kill anything!  You might build a product that is better than any single competing product from Apple, but without the ecosystem to tie it all together, to balance everything, to make sure that it all just works – without the balance, competitive products are fighting an uphill battle.

The question is how do you build an ecosystem?  Is there an ecosystem-potential for your industry?  I suspect that certain industries might more naturally lend themselves to creating an ecosystem, but I also think that any industry can indeed build such a thing.  In order to do so, you must identify what your strategic core access point (SCAP) is.  A SCAP is that by which your business can control the ecosystem.  Without a SCAP, your ecosystem either won’t be able to form, or it can easily be disrupted.  Looking again at Apple, what is their SCAP?  I would say that it is iTunes.  What started out as just an online store for music really has become (and always was) their strategic core access point.  Today, iTunes ties the ecosystem together.  If you have an iPhone, an iPad and an Apple TV, what links this things together strategically?  iTunes.  I’m not talking technology here in the sense of linking things together.  I’m talking about what holds the ecosystem together from an end user perspective.  You can see Apple furthering this with the App Store (which is in iTunes) which has been for their iPods, iPhones and iPad but has now been extended to include software distribution to the Mac.  With iTunes as the SCAP, Apple has built an ecosystem around it.  Once that ecosystem is built of course, the various products and services can link to each other, but they are secondary connections that could easily be disrupted if it wasn’t for the SCAP.  Apple’s products just work and a large part of that “just work” mantra is because of great design (which I will discuss in a future post), but Apple’s products just work as well because they leverage their SCAP, which is a hub for content.  Content is king and Apple made sure that content can flow seamlessly between their devices and services.

You can see a similar strategy with Google.  They too are trying to build an ecosystem.  They are competing head to head with Apple on many fronts, most notably at the moment with the Android phone platform and over the past few months with their tablets.  They have as well begun to compete on the laptop OS front as well as Google introduced their own OS called Chromium.  So what is the strategic core access point for Google?  It isn’t an iTunes-like product/service.  No not at all.  For Google, the SCAP has always been Search.  That is their point of control and from that they have spread outwards creating an ecosystem that builds off of search. Yes they provide access to a whole host of cloud based services (and quite nicely I might add), but Google’s SCAP is search and the ability to search across all types of content.  That is what will string their ecosystem together.

To be successful in your own industry, uncovering the potential to build an ecosystem for your customers is definitely something worth taking a look at.  I think over the next several years, we’ll see more and more organizations trying to create these types of environments to deliver products and services.



Categories: Mobile Computing, Strategy

Tags: , , ,

14 replies

  1. Thank you!
    I love this post of yours. Thinking through this for a health related industry I am in.

  2. I like the idea, but how does one go about identifying or settling upon a strategic core access point? Do you think companies like Apple and Google consciously did that or simply backed into it (eg. right time and right place)?

    • It is all marketing
      The ‘ecosystem’ is just marketed well. Nothing special about it. You’ve entered Apple’s distortion field!

      • It is always humorous to see this kind of polarized view. Of course Apple needs to market well, what company doesn’t? Are you telling me that the other companies in this sector don’t need to market? Marketing alone doesn’t drive the kind of growth that Apple has had. People must genuinely find the products useful otherwise no amount of marketing could drive those kinds of sales.

  3. Excellent post. I like the idea of a strategic core value/competency – do one thing really really well and build from that foundation. Thanks for reporting this. I hadn’t seen it originally but stumbled on it this morning. Glad I did!

  4. Do you have a suggest approach or methodology to establishing this kind of strategic control point? How does a company identify if they have one and what it is? How does a company create one if they don’t have one?
    Interesting ideas that I’d like to explore further.

  5. This is a good discussion topic, but not as simplistic as you would think. If it was easy all companies would do this. Do you think that RIM wouldn’t have already tried this if it was easy? It’s hard to do and involves luck & timing as well. What would this strategic control point be for a company like RIM? Email? Security? They don’t seem to have anything that they control strategically – at least not anymore.

    • RIM has email locked up. That was their control point. They squandered that lead by getting into consumer devices rather than building out on the business community. You are right though when you say “not anymore” – they lost control of that competitive advantage.

    • RIM never had an advantage nor does it.
      Apple is a marketing master but products suck.
      Google will dominate because it’s opensource. People are sick of corporate greed and patent wars.

  6. What a great piece. Would love to see more like this on your blog. Just added you to my daily RSS feed. Look forward to more.

  7. Good position and accurate idea. Total control over company strength is improtant. Good model.

Trackbacks

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