A Little Bit of Everything — Ecosystem approaches of the Big and the Small
As I was writing this very article on my laptop, I forgot to notice my laptop running out of charge until it was almost too late. An initial second of panic, followed by an immediate sense of relief- this file was on the cloud just like most of the files on my laptop. It took mere seconds to boot up my tablet and continue from the exact letter I had left it in.
The above paragraph was not intended to be the opening of this article, but it fit the subject matter quite well. If I must attribute someone for saving me from going through the whole ordeal again because of a careless error, it probably should be Satya Nadella.
When Satya took over the helm of Microsoft in 2014, the company was sitting on a cash cow that had been giving them assured revenue year-on-year i.e., the sales of Microsoft license contracts to organizations and individuals. On an ideal scenario, the whole cycle had only two customer touch points with respect to revenue- Installation and Renewal, unless there were some troubleshooting required during the contracted period which was anyways not bound to sales. Between the date of installation and end of contract, there were no incentives to connect with the customer and that was how things happened for years. In the words of Bert Lance,” If it ain’t broke, don’t fix it!”, right?
Maybe in Satya’s eyes, the lack of relationship building with customers was already considered as broken, since he brought in a wave of transformation in how Microsoft sold its offerings and how it priced them. The crown piece of this transformation was a singular philosophy- “cloud first”. Providing their offerings as services rather than products meant consumers didn’t indifferently pay for the products used but rather based on their individual usage and consumption. And this meant the sales cycle had to be continuous and not discrete as before, which brought a paradigm shift in how customers were handled by the tech giant.
It would be apt to presume that the tech giants had ushered this age of service offerings, because coincidentally in the same year Satya became the Microsoft CEO, Apple emulated in the consumer market what Microsoft did in the B2B space. During the WWDC 2014 Apple introduced its concept of Continuity which is what is widely today referred to as the Apple Ecosystem effect, which includes seamless transition and access from multiple Apple devices by a singular Apple ID user. This was also used to create an omnichannel experience for Apple’s services such as Apple Music, Apple TV+, etc. and have recently bundled their multiple offerings into a singular subscription called “Apple One”.
What was begun by the Big Tech eventually created desire to be emulated by various other industries- the shift from selling products to building continuous consumer relationship with a host of services. One of the outcomes of this was the conversion of Telecom players from Communication Service Providers (focused on selling data and voice packs) to Digital Service Providers (being a single point of access for network-related services and multiple value-added services leveraging the network such as Music, OTT, etc.). In many ways, DSPs are creators of region-specific ecosystems that go head-to-head with the Big Tech ecosystems by trying to provide experiences that are geo-culturally more focused but still sometimes find themselves lagging in terms of sheer capabilities and financial might to compete with the behemoths.
And thus, we find ourselves in the present, where consumers are slowly habituated to being subscribers to everything they need to avail and have already subscribed to such vast ecosystems, most notably being Amazon Prime which encompasses everything from retail to entertainment. Consumers are getting used to expecting curated experiences rather than products and demand the same from companies, which is how Data functions as the fuel that fires all these individual ecosystem machines.
The key point to note here is that almost all the ecosystems that are currently available are built with the intent of reaching out to the largest mainstream audience possible and then build personalized experiences catering to individuals who fall into the subscriber pool. This has two implications- on the business side, such vast nets of ecosystems can be thrown only by big corporations that can afford to sink vast investments at an initial phase and can afford to sustain losses presently in expectations of future revenues due to their “too big to fail” status. On the consumer side, segmentation of customers in current ecosystems are done only after they are reeled into the subscriber base and are left with experiences that feel more like a big world that has something for them rather than a perfect small world where everything in it is for them.
That gaping need of a more tightly knit experience for specific customer segments is where the non-Big Tech could compete using collaborative partnerships to realize ecosystems built from scratch with a specific type of consumer in mind. Big Tech ecosystems provide a challenge for the survival of smaller fish such as start-ups in the mainstream. Thus, start-ups have started to focus on niches, and this is what could be the building blocks for focused ecosystems. Corporations can focus on merely establishing a platform and inviting multiple collaborators such as start-ups who can bring in their targeted expertise together to create smaller perfect worlds to compete with larger imperfect ones.
An illustrative example would be building an ecosystem for gamers. A high-level approach on how this could be achieved is to have non-Big Tech firms such as DSPs focus on creating a platform and a brand that is built completely with the focus on gamers and engaging them in multiple touchpoints. Each touchpoint is an opportunity to provide an offering that can be tailored by onboarding start-ups that excel in addressing the gamer niche. With enough collaborations proportional to the touchpoints, a perfect ecosystem for gamers can be realized that takes care of everything from multiplayer experiences- finding squads to play with, to suggesting playlists to go with specific games, or even refilling their snacks to eSports viewing experiences — end-to-end packages for eSports tourism, Fan Club finders, co-watching experiences in the Metaverse, Virtual Stores, etc. Such an ecosystem completely built around the gamer customer segment provides a much fulfilling experience that are unrivalled by any general ecosystem offerings.
And here’s us hoping to see multiple smaller worlds amidst big planets that would make the universe much livelier!
