The Six Most Valuable Companies in the World Are Doing This—and You Should Be Too
Look at the six most valuable companies in the world — Apple, Alphabet (parent company of Google), Microsoft, Amazon, Facebook and Alibaba — and you’ll see one important element in common. Each created their success by deliberately and aggressively building powerful interconnected networks of customers, partners, suppliers, content providers, investors, and others.
I call these interconnected networks business ecosystems (SM). Business ecosystems are a natural outcome of the way we buy, sell, and trade with each other, and I suppose they’ve existed since the beginning of humankind. But in today’s fast-paced and interconnected world, businesses live or die based on how well they cultivate and connect members of their ecosystems (view my video on this and other topics here).In today’s fast-paced and interconnected world, businesses live or die based on how well they cultivate and connect members of their ecosystems. Click To Tweet
It’s this connection—the enabling of relationships, commerce and sharing of ideas between customers and other customers, suppliers and other suppliers, content providers to customers—that makes today’s business ecosystems so powerful.
Each of the six companies I mention above created its own uniquely valuable connected communities. Amazon built an ecosystem both of sellers and of customers who contribute reviews. Apple built an ecosystem of app developers. Facebook built an ecosystem of content consumers and providers (mostly just regular people, sharing their photos and opinions), funded by the advertisers who want to reach them. Google seems to connect nearly everyone in the world, in hundreds of different ways. Microsoft has legions of developers, hardware manufacturers, and customers. Alibaba connects importers and exporters in 240 countries, and runs a global B2C and consumer-to-consumer shopping platform.
These examples are ecosystem powerhouses—companies that connect millions, or even billions, of ecosystem members. They use artificial intelligence to know more about their ecosystem members, and do more for their ecosystem members, every year. However, even if your company is small, low-tech, and doesn’t have a bit of AI, you can build a thriving ecosystem to support your success.Even if your company is small, low-tech, and doesn’t have a bit of AI, you can build a thriving ecosystem to support your success. Click To Tweet
Managed well, your ecosystem can accelerate your company’s growth and insulate you from market upsets. Your ecosystem can alert you to emerging trends, provide you with word-of-mouth advertising and innovative new ideas, and create new sources of revenue. It can be a flywheel of stability or a catapult to exciting growth opportunities.
On the other hand, a poorly managed or neglected ecosystem can hold you back, or even put you on a downward spiral of diminished reputation, calcified ideas, and declining sales. I’ve observed several common mistakes companies make in managing their ecosystems. Some underinvest in nurturing and maintaining their ecosystem, letting other priorities get in the way. Some apply inadequate safeguards to vet and guide ecosystem members, so a few members spoil the value for others. Some fail to set the vision and strategy for their ecosystem, so it develops in an aimless and haphazard way. Some fail to create value for all participants, so their ecosystem slowly shrinks or becomes irrelevant to its members.
No matter what business you are in, you should be thinking about who’s in your ecosystem now, who you would like to have in your ecosystem, how you would like them to gain value from it, and how you can make it easier for them to gain that value. In other words, you need to develop a robust ecosystem strategy for attracting and retaining the ecosystem members who will be most beneficial to you and to each other.No matter what business you are in, you should be thinking about who is in your ecosystem now, who you would like to join, how you would like them to gain value, and how you can make it easier to gain that value. Click To Tweet
Follow these five steps (here’s a graphical framework you can use) to build a vibrant, self-reinforcing ecosystem that can propel your company’s success:
Step 1: Take inventory. The first step is to identify, at least in broad terms, who is already in your ecosystem. Some members of your ecosystem may be obvious to you, such as customers whom you talk to frequently, or suppliers who come to your annual conferences. Other ecosystem members may be less obvious. One company I know did not realize that there were developers who specialized in adapting the company’s software to niche industries. These developers were flying under the radar, until someone took a close look at who was connected to, benefiting from, or doing business with the company.
Step 2: Identify your ideal participants and begin to attract and retain them. The second step is to decide who you would ideally like to have in your ecosystem.You want people and organizations to join your ecosystem whose goals are compatible with yours and who can help you reach your own goals. Developing clear criteria for who your ideal members are will make the process of growing your ecosystem more targeted, efficient, and effective. For example, if you’re trying to build a community of app developers, you want to attract the best of the best, with a particular set of skills. To attract these developers, you may wish to hold a hackathon or a contest. You may also decide to tailor your market messaging and the design of your platforms to appeal to the particular type of developers you seek to attract.
With today’s technology tools, it’s certainly easier than ever to connect and strengthen your ecosystem, but it can require a leap of faith. You can’t be sure who will join your ecosystem and how they will interact with and do business with the other participants. You need to nurture and encourage the members you want to keep, while ensuring that bad actors don’t cause problems. And, there may be current members of your ecosystem who will not play a role in your ideal future. For example, unprofitable customer segments, channel partners who deliver a bad customer experience, and fraudulent players. Develop a plan for how to migrate away from these less-desirable ecosystem members.
Step 3: Assure participants get value. The third step is to paint a vision for how ecosystem members will derive value and contribute value. People and organizations that participate in ecosystems do so because they derive value from participating. There are myriad forms of value, including making money, gaining referrals and relationships, learning, demonstrating skills, and gaining access to information, suppliers, and customers. Ecosystem members also contribute value. Some members pay and some members make money—and some members both pay and make money, depending on the situation. Some members contribute knowledge, endorsements, reviews, products, time, and the like, while others consume these things, and some do both.
For example, OCEARCH, a nonprofit that focuses on shark research, has developed a robust ecosystem, centered on its top-10 ranked science app, Global Shark Tracker. The ecosystem’s members include professional fishermen, who run expeditions to catch, tag, and release sharks; university researchers who collect and analyze data on sharks; brands like Yeti and Costa, which have contributed $40 million to fund expeditions (and, in return, have benefited from 12 billion annual earned media impressions); and K-12 school children, who use OCEARCH’s lesson plans to learn math and science using real-time shark tracking data. The sharks each have their own names, Facebook pages, and Twitter handles.
It is easy to imagine that the kids get more engaged in their math problems when they are talking about a real, 4,000-pound shark (like Mary Lee, Oscar, Grey Lady, or Cisco), and they can see up-to-the-minute information on where the shark is swimming. By connecting fishermen, researchers, brands, and kids in a powerful, symbiotic ecosystem, OCEARCH creates value for every ecosystem member.
Of course, you may not have a value provider as captivating as a shark! But it’s imperative that all participants are enjoying and contributing their own type of value. You may not always know what is transpiring in your ecosystem, and much of the “give and get” between members may be beyond your control. However, a sound ecosystem strategy can put you on track for a healthy, self-reinforcing ecosystem that drives your company’s growth.
Step 4: Create physical or virtual engagement platforms. The fourth step is to create a means for current and prospective ecosystem members to easily interact with each other—and with you—and to gain value. Many of your ecosystem members may already be interacting with each other, but there are things you can do—running events, creating technology platforms, and providing connections and referrals, to name a few—to enhance and stimulate that interaction and to help ecosystem members both give and get more value.
Airbnb has created a platform that makes it easy for owners to safely rent out their homes or rooms and for guests to find a safe, comfortable, and convenient place to stay. Ride-sharing services Uber and Lyft have created platforms that facilitated the creation of new jobs and new forms of transportation. Even a small company like mine, Setili & Associates, can gain great benefit from connecting members of its ecosystem, so that they can build relationships and learn from each other. We’ve hosted events, introduced clients to each other, and developed a network of consultants who contribute to each other’s work and growth. Whether high-tech, low-tech, or no-tech, there are things you can do to enhance the value and vibrancy of your ecosystem.
Step 5: Listen, nurture, and enhance. The final step is to continually listen to ecosystem member feedback and to enhance your platforms to assure members get the value they desire. The most successful ecosystems work to enhance member value and to make it easier for ecosystem members to interact with each other to gain value. They look for unexpected sources of value, and when they spot these, they replicate or expand them.
For example, when Salesforce first began to host events, they were surprised that attendees were more interested in hearing from each other than they were in hearing from Salesforce representatives. Salesforce recognized this unexpected success and took advantage of it. Customers are now among Salesforce’s best salespeople, problem solvers, and application developers. The most recent Dreamforce gathering attracted over 170,000 participants, who attend in order to interact with each other.
Facebook is another prime example of continuous listening and enhancement. At any moment, Facebook is running hundreds of different A/B tests. They keep what their ecosystem members value and discard the rest.
Conclusion: Make your ecosystem strategy a priority, starting now. And—just as important—once you’ve got your ecosystem humming along, don’t lose steam and start to neglect it. A well-managed ecosystem can create tremendous value for your company and for your customers, suppliers, content providers, and other stakeholders. By solving common problems, sharing information, and helping each other to respond to market upsets and opportunities, your ecosystem can be a powerful driver of fearlessness and agility.
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Amanda Setili, author of Fearless Growth: The New Rules to Stay Competitive, Foster Innovation, and Dominate Your Markets, and The Agility Advantage, How to Identify and Act On Opportunities in a Fast-Changing World is president of strategy consulting firm Setili & Associates.
For more strategies, videos and free materials, please visit www.setiliconsulting.com. Or, contact Amanda at Amanda@Setili.com to discuss how she works with companies to improve profits, performance and growth.