Researching ecosystems that span industries from e-commerce and publishing to semiconductors and healthcare over the past decade, we found companies that have been successful for years by contributing to an ecosystem. Sometimes, by contributing as partners, they earn even higher returns than those enjoyed by the ecosystem leader. But the path to success is littered with traps for the unwary who, despite their best intentions and willingness to invest, may find themselves confined to an unprofitable niche role in the ecosystem, drained of their intellectual property, or supplanted by the leader. So how do contributing partners secure and sustain a profitable position in an ecosystem and leverage it to their advantage? We identified five keys.
CHOOSE THE MOST PROMISING ECOSYSTEM
Competition is increasingly between ecosystems, rather than only between individual companies. In the emerging autonomous vehicle industry for example, Baidu has built an ecosystem around its open Apollo project that brings together almost 200 industry partners, including companies as diverse as BMW, BYD, Bosch, Continental, Daimler, Ford, Grab, Honda, Hyundai, Intel, Nvidia, Microsoft, and the insurer Swiss Re.1 Meanwhile, Alphabet, Google’s parent company, has built a competing ecosystem around its Waymo subsidiary’s artificial intelligence (AI) and lidar technologies that includes Stellantis (Fiat Chrysler), Geely (owner of Volvo cars and its strategic affiliates Polestar and Lynk & Co.), Jaguar Land Rover, Nissan, Avis, and UPS.2 In the cloud hosting market, the AWS ecosystem is dominating this fast-growing industry, with several competing ecosystems led by Microsoft, Google, Alibaba and IBM.
While it may be possible to join multiple, competing ecosystems as a contributing partner, it will often make sense to focus your available resources on aligning your strategy and co-investing with just one. That choice should first be guided by the credibility and demonstrated commitment
