Notes on synergy, network effects, and ecosystems

A first-principle formalism of a high-level technology strategy that enabled Google, Amazon, Netflix, and Uber to dominate markets. Co-authored by Niraj Pant.

An installation of the “Notes” series. Formalisms in technology, business, and philosophy. Lots of attempted formalisms. A difficult search for generality and rigor, as the two are at odds.

Bumpers.fm discussion, Niraj and I geek out over ecosystems
“Two telephones can make only one connection, five can make 10 connections, and twelve can make 66 connections.” — Wikipedia

Google’s Ecosystem

Google pioneered their innovative PageRank technology and leveraged it to build a search engine. This was built atop previous innovations in computing (mainframes, operating systems, the internet). After this product started to get its footing and hit product-market fit, it launched AdSense, a collection of tools for internet marketers to advertise online. This helped scale their ad revenue dramatically, showing their large product-market fit. Eventually, through Google’s notorious 20% time, they expanded horizontally with Gmail, Drive, Maps and many other offerings . In the process, they built a single login and identity to access all of these services, as well as slick integrations between each product (i.e. easily embed Google Drive documents in Gmail). After this horizontal effort, they went back and rebuilt layers below their core offerings. Rebuilt the browser — Chrome, rebuilt the OS —Android and ChromeOS, rebuilt the hardware— Chromebook/Pixel, and attempting to rebuild the Internet — Fiber.

Just a slice of Google’s current consumer-facing ecosystem

Amazon’s Ecosystem

Counter-examples

Following our study of the dominant ecosystems, we wanted to dive into the study of tech giants that failed to build ecosystems and were consequently toppled. What would have happened if Yahoo had built out a more cohesive ecosystem? Why didn’t VMWare create something as dominant as AWS? Coming soon.

Other Ecosystem Case Studies

A list of other case studies we will release at a later time:

  • Netflix
  • Salesforce
  • Facebook

UIUC ’17 — http://wileyjones.com — aspiring ____________?

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