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Sign upWhy the ecosystems revolution is happening now
Julian Birkinshaw explores why businesses built on networks and marketplaces are rewriting the strategic playbook today
A business as a gated network of customers, suppliers and producers of complementary services is not new. The Lloyd’s of London insurance marketplace is a classic example of a business ecosystem and it was founded in a 17th century coffee house.
The idea of orchestrating a network or market also underpins complex supply chains, the term has been used in a business context for 20 years and yet today everyone is talking about ecosystems.
What has changed is that the fastest growing and most successful companies like Amazon and Google, Alibaba and Tencent, Uber and WeWork are explicitly positioning themselves as ecosystem players.
We don’t know if all these ecosystem orchestrators will retain an enduring advantage. Spotify, Uber and WeWork have all yet to make a profit. However, the overarching feature of many of the super star names in the business world of today is their operating models: they are not building moats to keep competitors out. They are operating turnstiles.
A new breed
Analysts refer to moats as shorthand for referring to a bundle features that a company derives competitive advantage from. A moat is created by the ownership of a patent, access to a scarce resource, a strong brand or an artefact of regulation.
