Forget Products. Build Ecosystems.
How products are transforming to open interconnectable interfaces.
The most interesting thing I have heard from Mark Zuckerberg, during last April’s F8, was his presentation on Facebook’s product development process. According to Facebook’s CEO, their approach starts by building a new technology that “can help people to share and connect”. Then, they build this innovation into a product that offers value to one billion of users around the world. And when this product is mature enough, they build a full ecosystem of developers, businesses and partners around it.
I think that what Zuckerberg described is not just Facebook’s product development process. It is the evolution of innovation development and diffusion. It is what is happening today.
From Platform to Ecosystem
Over the last decade or more, product design and development was dominated by the concept of platform innovation: enable the creation of more inventory without creating more stuff. More specifically, companies were creating value by enabling other companies to use their products or to build on their products. Google, Facebook, Apple, Amazon, AirBnB and most of the today’s major tech companies’ growth was based on this approach.
However, a new era has already arisen.
The main idea around platforms is to enable third parties to use an infrastructure that you have developed, providing it as a medium for value distribution. However, that creates obvious limitations. What if a radically good idea cannot be supported by the provisions of any existing platform, like Android or iOS? And what if the general idea of platforms set limitations to both parties, platform provider and product developer, to create a solution that can cover people needs?
The solution is to reduce those limitations:
Do not build products. Do not build platforms. Build ecosystems.
The core idea around ecosystems is interconnection. The elements of an ecosystem are interconnected in a vital form for their growth. Every part of the ecosystem increases its chances to survive through its connection to the ecosystem. At the same time, the possibility of the ecosystem to survive increases by the number of the living organisms that are connected to it.
Something similar is happening with products, nowadays. Products are evolving to ecosystems. More precisely, products are evolving to hubs of value that other products can connect with, in a vital for their growth way.
Think about Slack, the trending business communication and productivity app that has been described as “the fastest-growing business app ever”. Slack was launched in August 2013. After their initial tremendous success, Slack’s team decided to launch their “Platform” in order to enable developers to create products in Slack’s platform. However, the classic form of a platform would decrease the possibilities of this opening. And thus, Slack has not limited this opening to a traditional form of platform. They created an ecosystem.
By now, everyone knows Slack’s Apps. As a user of Slack, you can integrate Google Analytics and receive insights for your website, store or retrieve data from your Google Drive account, manage your project with Howdy, receive directly your brand’s word-of-mouth through Mentions’ integration, and even communicate directly with your customers through the integration of your customer’s support tool.
Similar to Slack, products are evolving to open interconnectable interfaces, which enable other products to integrate with them, in order to provide their value to people.
What is the value?
Ecosystem is about enabling companies to offer the value of their core product through the integration with your product. More precisely, it is to enable other products to use your product interface as a medium to provide their already created and constantly improving value. Companies committed to the provision of a specific solution for people’s needs do it through your product. And these are the two significant values for you.
Firstly, your product’s value increases without your team’s effort. Users are enabled to use more features that you have not committed sources and effort to develop, to maintain, to promote and to constantly improve. Every time that your team decides to commit to the creation of an additional feature that differentiates from your product’s core value, you take a significant risk. However, companies used to take this risk in the past, due to the expected reward.
Through the ecosystem logic, value creation and value provision are separated.
Let’s consider the example of Trello, one of the most trending task management tools, those days. Trello has become part of the project management function of every size company and team. Trello’s simplistic logic provides a solution to organize and prioritize tasks with minimum effort. However, it was not providing one of the most important tools of every project manager: Gantt Charts. A solution would be to commit a team to build this feature. The alternative was to provide the opportunity to a team out of the company to build this feature. And Trello did exactly that, with Elegantt.
Secondly, you increase the possibilities, as Nir Eyal would put it, to turn your product into a powerful habit. By enabling other products to provide their value though your user interface, you increase the things that users can execute directly through your product. This means that users are being educated to do more things though your User Interface and Experience, spending more time with your product, providing you data that will enable you to improve the core value of your product and turn this product to a significant part of their routine. And that is exactly what products needs in order to thrive.
Slack, by enabling so many products to integrate with its core user experience, provides functionalities that otherwise should be built by its team. That increases significantly the value of Slack for its users. They are able to do so many things that otherwise they would need to login to other products in order to access them. But they do not need to. They can read analytics reports, answer to customers requests, or even call an Uber, by using the same interface and by getting used to the logic of Slack’s commands in order to do everything. Namely, by forming the strong habit of using Slack.
…and to connect or not to connect?
“But what is the value for someone who decides to develop a Slack app or a Trello power-up?”. This is the automatic question that I received from everyone that I described him/her the ecosystem concept. I strongly believe that companies could gain significant value by integrating with other products.
Firstly, it is a brilliant go-to-market strategy. Think about a startup that would like to build a new customer support software solution. Normally, it would require to design an interface and to build a minimum reasonable user experience. After that, it would require to spent marketing efforts in order to raise awareness of potential customers and to persuade them to try the product. The required effort and cost could postpone the launch of the product. However, by deciding to create a Slack app, this founding team can only focus on the development of the core capabilities and launch months or even years earlier.
Secondly, it enables to provide a core value through user’s favorite interface. More precisely, every interface. It is a clear fact that people would like to minimize the time they spend during their working day and everyday life. It is really reasonable that for various really valuable products, they would prefer to stay in the same environment that they use already for so many other things. In the integration era, you can enable them to use the interface they prefer.
The idea of product ecosystems describes the value that the interconnection of products provides to both companies and users. It impacts significantly the innovation development and diffusion process and provides unlimited opportunities for new value creation. Product people and startupers can achieve outstanding growth by making the ecosystemic evolution as a priority for their roadmaps.
You just need to do one simple thing. Forget old products. Build ecosystems.
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