Lens five: Coopetition forces platforms into ecosystems

The platforms created by businesses are increasingly only a starting point. Meeting rising customer expectations often requires joining up with or being open to other participants, turning platforms into ecosystems of related products and services that evolve dynamically as constituents cooperate and compete.Scanning the signals 

Scanning the signals 

Ecosystems are the reality of the market today — whether organizations want them or not. Organizations set out to build platforms that they control and expand, but the messy reality of modern interconnected businesses is that often an ecosystem of diverse participants will emerge, and an organization will be forced to participate or lose its place in the market. The better you acknowledge that reality, the better placed you are to compete.

The key difference between a platform and an ecosystem is control. An organization can create and run a platform, which gives them control over who can participate. But a company can only loosely set standards for an ecosystem, and participants may emerge spontaneously. Like a biological ecosystem, a technology ecosystem involves competition and ‘survival of the fittest.’ This means symbiotic, parasitic and predatory behavior, as well as a continuing need to adapt or perish. There are limited resources — often economic, but sometimes something such as “consumer attention” — and the struggle for these fuels interaction, innovation and evolution. Signals here include: 

• Organizations with more than one ‘platform,’ and cooperation across and between those platforms. For example, we helped restaurant chain Sonic build a flexible digital platform that enables it to integrate to and experiment with interaction platforms such as voice, delivering more convenience to customers.
• Dynamic introduction and removal of participants within an ecosystem
• More “peer” relationships between components as opposed to relationships between “platforms” and “consumers” — this implies no central ownership of information, such as user accounts

The Opportunity

Consumers make purchasing decisions based on how your product fits in their ecosystem. Misunderstanding your position in the ecosystem can lead to poor business outcomes, while knowing when to share or ‘let go’ can create a source of competitive advantage. 

For example, for years car manufacturers were investing to build proprietary platforms, These platforms failed for two reasons. First, drivers don’t think about their car as a closed platform; they just want their maps and music playlists to work. Second, auto manufacturers don’t have the specialization required to build world-class entertainment or mapping experiences, and always provided worse alternatives to the Spotify and Google Maps of the world. Consumers ultimately don’t care about their car manufacturer’s proprietary platform, they just want to be able to extend their most important and personal ecosystem — their phone — into the car.

The lesson here is that enterprises that play to their core strengths, and make sure their offerings are built to interact with surrounding ecosystems that are evolving holistically, will be best placed to win over customers and succeed in the emerging business environment.