Build an Ecosystem

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.  You can see Apple furthering this with the App Store (which is in iTunes) which has been for their iPods, iPhones and iPad but will now be 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.

You can see a similar strategy with Google.  They too are trying to build an ecosystem.  The are competing head to head with Apple on many fronts, most notably at the moment with the Android phone platform.  They will however in the coming months begin competing on the laptop OS front as well as Google introduces 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.  

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. 

Comments

[Garry B.]

Interesting idea. Do you think an ecosystem model is applicable in the health service market? I'm in the US but would like to chat with you regarding this. If you would email me I would like to arrange an opportunity to speak. We have been exploring a similar idea with regard to services we provide to hospitals and doctor groups.

[Atien]

I think the real key to Apple's success has been the focus on marketing a premium product. It's largely due to public perception which they have managed to shape over the years. Yes, it all works well together, but so do other company offerings. Apple manages somehow to position their products differently. It's a marketing model, not a business model.

[shadow]

Instead of worrying about building an ecosystem, you should worry about GETTING A LIFE.
Do you think writing all this drivel makes you look smart? I think not!

[Willis]

I think you can see this occurring in today's markets beyond just Apple - everyone is trying to create the ecosystem approach it seems. The problem is that as with traditional products and services, you can't just copy another company's ecosystem. For example, Google is trying to replicate what Apple does. They have their own marketplace, their own music hub, etc. etc. I agree with you, Search, is their core lynchpin in their offerings, but their ecosystem too closely mirrors what Apple is doing. That is why the Google TV is now experiencing lukewarm market acceptance. The ecosystem is key moving forward in future organizations, but keeping the ecosystem differentiated is what will give companies strategic advantage.

[dissertation writers]

I watched a movie "The Silicon Valley", and there the answer for question "why Apple is so successful" have been given. They produce what people need, the workers are the best specialists in their field, they try to realize new projects. Do things that they like themselves, not just to sell them. Oh, my comment is so chaotic, but hope the main idea is clear. Thank you.