The Ecosystem Economy

Sometime back I had written about how to strategise in a scenario when a market isn’t giving your advertising any attention - and is not ready to buy from you - just because you aren’t a brand in their eyes as yet. Of course a whole lot of science was shared on how to go about it (Click here to view the story). But there’s another approach an MSME might need to follow if the market finds it incompetent. However ironic it sounds, this is the time to embrace growth the most - and that too, without any choice at hand. This is the time to become relevant to your customers.

In this piece, we will discuss how the world is moving towards an “Ecosystem Economy”. We will learn why and how the SMEs need to embrace themselves into larger ecosystems to stay relevant to customers today. 

To begin with, let us accept that we aren’t superheroes. It’s ok. Don’t be sad. Yes, we want to do a lot and offer our clients everything they need but there might be some time before we reach there. But then we also need to accept that the world is fast moving towards business models that revolve around ecosystems - in their respective industry domains of course. Customers don’t want to deal with a lot of partners today. Hence the need for “all eggs in one basket” ecosystem and the economy is already moving there. Let’s look at a few such successful ecosystems and tendencies of others towards building one. 

Wework: a startup ecosystem: offers coworking, entrepreneurial workshops, startup services, investment opportunities - in short covers end to end needs of startups. 

Shutterstock: Design ecosystem: offers all kind of design elements - photographs, vectors, cartoons, icons, etc.

Swiggy will very soon be delivering not just cooked food, but groceries, medicines, baby care products and a lot more things that you need for your household.

Grab is another brand who started off as a taxi hailing service but is aggressively creating its own ecosystem including payments, delivery and a lot other things in South East Asia.

HP, Dell and others have started offering Private Cloud solutions along with on premise hardware solutions. 

The list is just indicative but you might have observed that they are all brands that have the resources to create an ecosystem for their customers. What if you don’t? Well even if you don’t, there’s nothing stopping you from letting your customers enjoy getting all his ‘eggs in one basket’. After all, who said all eggs have to be yours? 

Customers will always have their unique requirements. Losing out in a scenario when your competitors are able to offer a portfolio or USPs beyond your abilities will always be brutal for your brand image. You will not only be seen as a small, amateur player but also risk suffering from a huge opportunity cost in the near future. Is it happening? Are you having trouble growing at a good pace? Don’t fret! You can still deliver that value. 

Overcoming lack of resources to create an ecosystem

How? By expanding yourself and making yourself larger. They say, do one thing and do it well. You can continue to follow the mantra if you wish. All I am trying to say here is that you might want to explore doing it through partners who can bring those other eggs in the basket. As soon as the whole package becomes a good value proposition to the customer, you job is done. The player whose customer it is gets to front end the deal while the rest enjoy the revenue that they earn from the value that they independently provide to the customers. 

If it is about your last mile reach, partner with brands who can extend your reach as far as possible. If it is about the portfolio of services, partner with brands (even if small) who can bring diverse and futuristic services for your customers (and are really good at it). If it is about, services required for your product, choose brands who can deliver than value on your behalf to your customers. 

The world is anyways already doing it for decades. Biggest of brands keep it easy for themselves following this model. Well, did you know that most large projects worth as much as a few million dollars are always won in partnerships? 

SMEs should also do more of this. Even if you are a small struggling website design agency, for an example, you can partner with another struggling but kickass graphic design agency; a content development agency and maybe another advertising. Just see what value proposition you can bring to the table for a young startup: If you package and strategise well, you can offer a project to define their go to market strategy from the very beginning, and then come up with their website, incorporating effective design and content, bringing in marketing automation linked to tracking and capturing leads, and further a strategy to convert the deals in the funnel through marketing efforts. 

Now, can a website agency, or any other agency discussed above bring this value proposition to the table?

Yes, you are right if you think that now you have become 4 different brands who provide the same set of services. But there’s no competition amongst you, right? If anyone gets a contract, you benefit if you are a part of it. Moreover, you have moved much above the clutter of various other only-website design and only-graphic design agencies. Look at it from that perspective.

But is it worth putting the effort of managing those partnerships? Of course it is. And will be all the more as we move further into the ecosystem economy. And then, this also helps you in another very important way. Let’s look at it.  

The Question of Indecisive Customer

In a world filled with several options, customers are spoilt for choice. Earlier, even if it was tough for you to sell your product / service because it didn’t exactly fit the customer’s requirements, you, naturally, had no choice but to impose your own service/product on the customer. But now that you are out to offer a complete ecosystem, the case is different. You naturally become consultative because you are pitching a wise solution that solves the customer’s issue. And trust me, the default ask of a customer is consultation incorporated into your offering. Today, he is not asking for any product in particular. Nor is he telling you what service he needs. 

In an economy fraught with extremely tight competition at every step, as the various options spoil a customers for choice, it also ends up making him indecisive. Why? because there’s very less scope for error and it makes him seek guidance on the way. Can you offer it to him? Of course, that’s what’s expected. This becomes all the more relevant in case the eggs in your basket are of a somewhat conflicting nature. You can’t be selling just your service/product even though you have your biases. But if you are smart, you will realise that forcing only your product/service will mostly mean the loss of that prospective logo. 

Developing your Partners

Running this ecosystem will come with its own challenges. I will focus here only on the prime challenge: As you grow fast, are your partners able to grow as fast? When you pitch your ecosystem to your customers, they expect all services to be of the same quality - however different they might be. Remember, he is entering into a deal with the quality he associates with your brand, careless about the fact that your partners will help you deliver half your services. As far you are concerned, it is your responsibility to ensure that your customer’s expectations are met. And for that to happen, you will have a very important role to play for all those partners who aren’t there as yet - I mean, those who haven’t attained the maturity that you have - or maybe those who are not as customer obsessed as you are. That’s where the Partner Development programs come in. Depending on how big or small your partners are, you might want to go the extent of helping them optimise their processes and other aspects of their business. 

But, why should you do that?

First, this will help you benefit from an assured quality of delivery from them. Secondly, it can help you win greater margins if you are able to help them optimise towards greater margins at their end. The benefit is, of course, mutually shared. The effort you have spent in their growth will be justified hence by the increased margins you enjoy and the great experience that your customers are able to enjoy as a result. Not just that, this will also help you earn loyalty from both your partner and the customer. . 

The only catch is to be very selective in who choose to partner with. That will be your make-it or break-it moment. Be very wise in your decision. Don’t be spoilt for choices like your customer ;) 

So are you ready to embrace the ecosystem? Would be great to know your thoughts in comments below :)