The 3 missing components
What usually strikes me is that the ecosystem proposals tend to become repetitive very quickly. Having explained the technology, content, and potential communities, the proposals often include more illustrations, explanations of the same.
This is surprising as both the Netflix and the Apple example show that there are (at least) three other components essential in the creation of a thriving and attractive ecosystem.
The first missing component is leadership. During Macworld 1997 in Boston (Steve Jobs having just returned to Apple), the focus wasn’t on the technology and content.
A change in leadership was necessary to build the Apple ecosystem:
“So, what are some beginning steps that we are gonna take? One of the first ones has to be to start at the top. Apple’s done a lot of change at the bottom and I think this change needs to start at the top, with the board of directors focusing on relevance.”
Leadership is about mission, vision, and creativity. The “leadership” has to identify and then “live by” a set of core values in all its decisions and operations. In late 1997, Apple adopted the slogan “Think Different” to re-launch the brand, go back to basics and focus on “what really matters.” Most of the business plans that I have reviewed don’t address leadership (including the role of advisors) or only mention it in passing.
The second missing (and related) component is the culture (of the ecosystem). We all know that a strong culture can lead to greater loyalty and a sense of community that attracts and helps retain talent, third-party developers, users, etc. A strong culture ensures that the ecosystem is unified and its stakeholders working together to achieve a common goal.
What is a strong culture?
Of course, the Netflix culture springs to mind where the company’s core values determine who gets “hired and fired.” Also, an ecosystem needs to offer an accessible, honest, and experience to stakeholders. Remember that if an ecosystem fails to behave in a responsible manner — in terms of how it handles privacy data, service providers or any platform stakeholder — then users will quickly migrate to an alternative ecosystem. As a result — given the dependence on the network effects that come from retaining users — that ecosystem will risk severe damage or even collapse.
Also, ecosystems must facilitate connections to a community of users that “matters” to them. They must “invite” genuine user creativity and engagement.
Apple communicated with the market through its popular and famous keynotes. The hype that Apple used to build up in anticipation of their events has proven to be an effective means of feeding excitement and interest in its ecosystem.
Today social media and social media platforms play a crucial role. Yet, too many startup companies (particularly when they are university spin-outs) rely on scientific papers and other academic output to create new markets, generate interest, and build communities. They don’t realize that in the modern digital social and mobile world, every company is now in the media business.
To be successful, however, an ecosystem needs to gather feedback from the community and ensure that the interests and concerns of users get regularly integrated into its services and operations.
And, smart use of social media is doing just that.
Building ecosystems require innovative partners. In 1997, Steve Jobs framed it as follows:
“Now, I’d like to talk about meaningful partners. Apple lives in an ecosystem. And it means help from other partners; it means to help other partners.”
This statement is still relevant today. Partnering-for-innovation involves re-thinking the external boundaries of the ecosystem to include actors that can have a crucial bearing on decisions and actions.
Key partners now include research centers, universities, and other companies.
Traditionally, these partners have been conceptualized as being on the outside, or peripheral to an organization, but the need for inclusive partnering means that such metaphors are no longer appropriate.
The recent announcement of Apple’s partnership with the global investment bank Goldman Sachs shows the relevance of partnerships today. For Apple, it opens the door to enter the financial ecosystem or bring financial services to its existing ecosystem.