Networks vs. Nodes
Developing New Business Models for the Connected Age
As CO.STARTERS has worked as a leader in the emerging field of entrepreneurial ecosystem building — which is essentially about building dense networks of trust, both institutional and personal, to support entrepreneurs — we find our work positioned in the middle of a unique combination of players:
- Grassroots leaders and local ecosystem builders, who use the business support programs and ecosystem building tools we offer
- Starters, who benefit directly and indirectly from our offerings
- National collaborators who share our mission to nurture thriving entrepreneur communities
Our team at CO.STARTERS has gradually realized we are not just collaborating with these players as we jointly pioneer a new way of doing economic development. As a company, CO.STARTERS is also shifting our business model to align more fully with an ecosystem focused approach. It actually took us a while to figure this out, and we are still working out the full implications of it for our own operations. But as this realization has become more and more clear to me, I have come to believe it is not just key to our growth as a company but also for the field of ecosystem building as a whole.
Moving Away from Industrial Age Business Models
Most organizations focused on ecosystem building, including CO.STARTERS, have followed an Industrial Age business model, even while we see ourselves as growing a new model of economic development for the Connected Age. Although the work we do may have a significant positive impact on building a collaborative culture and strong networks, the way it happens may not completely align.
Industrial Age thinking assumes a model where core activities are focused on making my own organization stronger — aggregating or extracting value from those around me to build a stronger node — not on building the network. While collaboration may be a key value, operational activities often focus on building a stronger (more competitive) organization by gathering more resources to ensure sustainability.
There is nothing wrong with pursuing sustainability — it’s essential for every organization. But ultimately, sustainability is a means, not an end. If the goal for our ecosystem building work is to create a stronger network of interconnected nodes (an ecosystem!), I think we have to acknowledge that conventional business models incentivize building stronger nodes, not stronger networks — the connections between the nodes. In other words, even if an ecosystem building organization’s purpose is to encourage stronger connections, a typical organization’s business model will work in a way that ultimately strengthens itself above others.
What if, instead, we could become stronger only by making others stronger?
Over the years, CO.STARTERS has evolved from what looked like a conventional Industrial Age business model of selling programs, to an engagement model in which we use our unique skill sets to help our members and partners succeed. Not by trying to make them more like us, but by helping them take what they are good at and build around that. Sometimes this process looks like consulting, but more often it means exchanging value in the form of relationships. By extending relationships, we help build value for everyone.
We are beginning to live out a paradigm that allows for an entirely new business model, in which our success is based primarily on making stronger connections between other nodes, which strengthens the network, rather than just strengthening ourselves as a bigger or stronger node.
Thriving by Connecting
Sometimes network builders aim to be the hub, building spokes that connect back to the hub but not to each other. We think a better design is to connect everybody to everybody. Our model is about thriving by connecting. If we do it right, CO.STARTERS gains by being a reliable connector and multiplier of existing value, not by being the sole source of value.
We are finding success in a business model that is about strengthening network connections and helping other nodes become stronger. This activity is so powerful that it creates abundant value for everyone to capture. We use our share to fuel our work, and as we grow, we work to invest further in building stronger connections in the network. We are the connectors, the integrators, the weavers, the glue. That’s how we believe we can thrive.
As we grew, CO.STARTERS found that we are really good at connecting grassroots leaders. Now we are doing that for our wider network of collaborators. We offer a unique combination of thinking strategically and creating practical, sustainable processes that people can interact with. All of the work we do is collaborative by nature. That’s our philosophy and our operating strategy, and we are working to apply that model to everything, including the business model that powers our work.
While we are still a long way from finding the answer to this issue, I think we have identified a question I hope all ecosystem building organizations start to ask:
How can we not only do good ecosystem building work, but also design our supporting business model around ecosystem values of connection and collaboration?
Read on for more insights on this ecosystem building topic:
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