What’s Your Ecosystem Strategy?

Ecosystem Visual Green And Grey Final

…and Why It’s Critical in 2024

Distilling recent conversations across VC’s, founders and growth-focused leaders it’s clear that “ecosystem” and the strategy around it, is one of the hottest terms.

That said there is confusion on what this term, or strategy, truly means.  In significant part it is driven by a lack of  clarity around what is a “network”, “platform” or an “ecosystem”.

Start with the oldest, most established model – a Business Network. This takes a centralized company’s product or service, and scales market penetration with a distribution, reseller, and service / fulfilment set of partners.  It’s a standard value chain.  Additional synergies may (or may not) be around servicing a customer and persona, and can include joint marketing, account or regional planning, or CRM data sharing.   There is little in the way of open IP or significant new innovations or products created via this interaction.  SAP is a great example of a massive network and its impact on scaling and growth for the company.

As for Platforms, their growth and adoption is via their inherent ability to reduce friction between buyers and sellers connecting.   Scaling of transactions leads to lower cost and further attraction of transactors.  The platform attracts further aggregation of products and / or services on it, enabling a network effect.  The central coordinator or “owner” of the platform benefits the most from data and insights across the transactions and engagement.  PayPal is solid example of this, and arguably so is AirBnB.  The evolution and innovation on the platform is still owned and controlled by the platform orchestrator.

“Ecosystem Strategy” is Eclipsing “Platform as a Strategy”

An Ecosystem is different.  It means the sum is greater than the parts.   It goes beyond an existing company network or managed platform. It is much more decentralized, as well as open, with shared IP and innovation.   This creates new value, makes the pie bigger, and enables coordination and collaboration on an open, unfettered basis with these drivers:  

  • Information and Knowledge Sharing
    • Verified information and insights from trusted / certified sources in the ecosystem
    • Novel research, leveraged to build unique IP
    • IP is open to the ecosystem for continued innovation
  • Transaction and Data Sharing
    • Data and insights fuel standardization, efficiencies, automation, scaling
    • The network effect is accelerated
  • Business and Technology Innovation via the Ecosystem
    • Often clustered around key technologies
    • Business model evolution and differentiation
    • New value propositions for the customer
    • Defining or re-defining the Category

This agreed collaboration is catalysed by the ecosystem orchestrator, but becomes organic as well.

Consider ARM as an example, and recently in the news with its IPO.  This “Processor IP” ecosystem (also the Category name) has catalyzed a group of silicon, system and software companies to ship more than 250 billion ARM-based chips to date.  These players are often ruthless competitors (Apple and Samsung for example), but participation in the ecosystem means “the sum is greater than the parts” and specific benefits arise.  Joint research into chip design benefits all players involved even though they also compete with each other.  

Remarkably, ARM itself has never actually produced a chip. It was an ecosystem strategy at its early outset and continues to be one of the biggest and most successful ones to date. At least 90 per cent of smartphones produced globally today have ARM designs in them (and thus pay royalties to ARM). For “higher-end smartphones”, the market penetration and share are an astounding 99 per cent.  

Alibaba also took a very conscious and methodical ecosystem approach, and quickly dislodged the market leader in China (eBay).  Core to this was allowing buyers and sellers to connect directly with each other, as well as encouraging innovation within the ecosystem and across players.  At many junctures you can identify where Alibaba avoided a revenue opp because of the conflict to its ecosystem strategy.

The Global Ecosystem Shift – are you ready?

This fundamental understanding and re-think by savvy Founders and new start-ups is leading to an ecosystem focus and strategy.   It is also being driven by an understanding that 2024 will be a very different environment.  Consistently we hear these factors driving the thinking around the Ecosystem route:

Cost of Capital

With the cost of capital radically changed, and likely not returning to “zero rates” or “free money” in the foreseeable future, founders and innovators are looking at less “build it ourselves” to “leveraging an ecosystem”.  How can I catalyze and orchestrate mutually-beneficial research, design and build-out?

Platform Disruption (or “I fought the law, and the law won”)

The major platforms look a lot like the former railroad monopolies.   They will continue to receive a large focus from government and regulatory bodies.   The recent win by Fortnite over Google https://bit.ly/46Y4GvC shows how disruptive this will be.   And it also shows how nimble players will be able to seize new opportunities, especially positioned as legitimate, open ecosystem cooperation.   Look for more disruption of platforms and new Categories defined with ecosystems at their heart.

Global Trade and Business Flows 

Unless you have been under a rock, it is impossible not to see the massive changes in trade, sourcing, trade finance, shipping, and documentation underway.   Whether it is “on-shoring”, “friend-shoring” or diversification (a lot away from China).   These seismic shifts mean a multitude of new angles and openings.  It is up to Category thinkers and designers to ID these new opportunities and redefine the Category and supporting ecosystem

Climate and Sustainability

Stating the obvious, the impact of climate and sustainability will remain relentless.  It will disrupt, re-define, and catalyse new thinking around measurability and interoperability of GreenTech.  It will create “strange bedfellows” and new combinations of dependencies and partnerships.  New Categories and supporting ecosystems can, and must, emerge.   Within this the opportunity for ecosystem strategy and deep-thinking is immense.

“Don’t Just Find Your Tribe, Build it”

How can we seize this opportunity in 2024?  

First, start with the problem.  Don’t start with your product or your company.  What is the unique  problem that needs to be solved?  How can I describe this in a compelling Point of View (that leads with the problem)? 

What is this new Category that is being redefined or created?   And given that a Category cannot just be one company (you), how can you visualize the supporting ecosystem?  What are the different  market, regulatory, integrations, data-flows, delivery partners, R&D, analysts, media (the list goes on) that are relevant and key to this new Category and ecosystem?  

Experience shows that visualizing the ecosystem (the segments, players and value flows) is critical.  But the additional key question is how will you track and engage with the different players?  How do I prioritize with a structure for Ecosystem Tracking and Optimization?  Who on my team will be responsible for different stakeholders?

“We need you to lead us”

Your Ecosystem strategy and optimization is about thinking and playing bigger. It enables you to punch heavier than just as one company. It tells a story and shows potential participants how they and their organization are part of the Category Ecosystem and are part of solving the problem at its heart. It shows them that they can be part of something bigger. It builds a tribe. It builds a movement!

So Lead, don’t follow, and demonstrate your clarity of strategy, POV, and the Category’s Ecosystem: you will in turn be rewarded with growth and leadership!


The Out-Position team has experience and a track-record that you can leverage and catalyse for your category strategy and design.

Contact us

We work alongside you for this design-thinking process, from the problem clarity and category defined, to a powerful point of view.