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Digital Evolutions Startups, Platforms and Ecosystems
Mentorship Lecture - 25th/26th Sept. 2013
by Simone Cicero - meedabyte.com - @meedabyte
Exponential Times Digital Ecologies
Platform Design Thinking
Digital Evolutions
Understanding Dynamics
Exponential Times
everyone is networked with everithing
everyone is networked with everything
Tech Cycles (every 10 years)
Now it’s time for Wearable
Image from KPCB Internet Trends ‘13
Two main disruption drivers
A growing computing density in
matter
Growing possibilities in AI
and Machine Learning
Connectedness =
Sharing more and more
Text Pictures Videos Sounds Data
Consolidated Explosive Growth
Ramping up fast
Emerging Emerging
Mobile chats, Social
networks
Vine, Intenet Cams
Sound sharing,
video chats (eg: Snapchat)
Personal Tracking,
Quantified Self
Lifelogging!
Data is all & all is Data
Everything it’s personalized. Data are connected and socialized. Devices are allover the place. It’s the Digital Market today.
Nature Humans
Technology Interactions
“Order doesn't come by itself” Benoit Mandelbrot
chaos
“We're just increasing our humanness and our ability to connect with each other, regardless of geography” Amber Case, (Cyborg Anthropologist) - SXSW Keynote 2012
Non linear dynamics
It’s kinda hard to predict stuff
Illustration: Simon Wardley – blog.gardeviance.org
Digital Ecologies
All this demand for innovation drives componentization*
as a buyer you push down price and ask for standardization: this creates your competition.
* breaking down into cost competitive and interchangeable pieces.
Illustration: Simon Wardley – blog.gardeviance.org
Increasing competition in demand and supply
Red Queen Effect (evolutionary biology)
Regardless of how well a species adapts to its current environment, it must keep evolving to keep up with its
(also evolving) competitors.
competition = coevolution
Fortune 500 companies life expectancy in 2013 is 15 years.
Was 70 in 1930.
“Software is eating the world”
Marc Andreessen
Access +
Componentization +
Collaboration =
the highest disruption rate ever
Long tail = Diversification Diversification = Niches
Niches = Economies of Scope
“Whereas economies of scale for a firm primarily refers to reductions in the average cost (cost per unit) associated with increasing the scale of production for a single product type, economies of scope refers to lowering the average cost for a firm in producing two or more products”
The Age of Economies of Scope
Designers are increasingly dealing with designing tools that allow users to create
value on their own (and within a community).
Switching from Economies of scope (multiple products) to User Centric experiences (user
customizable products)
“Toolkits for user innovation allow producers to abandon attempts to understand user needs in favor of
transferring need-related aspects of product and service development to users
along with an appropriate toolkit". Eric Von Hippel
“Unleash your creativity by customizing select products to create exactly what you want with eBay Exact. Simply select a product, choose a design, and add your own personal flair to create a unique item for yourself or someone special”
"Once you finish assembling it, you’re emotionally attached to that. You’ve basically gone through the process to build your own phone”
Moto X head product manager - Lior Ron
tools
Facilitated Contexts/Channels
Consumers can also become Producers and Designers
themselves.
Roles can change
allowing peer to peer production
Understanding Dynamics
Digital Market: opportunities & huge competition What Dynamics?
Pioneers Thrive in uncertain times Search for Experimentation Accept Failure
Players that face poorly understood markets, trying to define gaps and opportunities, constantly undergoing changing dynamics and small numbers. They want to create the future.
Startups
Settlers Learn from feedbacks Investigate needs Spot new trends
Players that face increasing demand, growing market opportunities for mature products and revenues that grow accordingly
Platforms & Ecosystems
Town Planners Search for self disruptions Base business on measures and scientific models Optimize for operations
Leaders/players that face standardized demand and fight growing competition on mature markets. Always focus on essential cost of doing Business.
Ecosystems & Industrialization
The ILC Cycle
Illustration: Simon Wardley – blog.gardeviance.org
Innovate Leverage
Commoditize (repeat)
Facebook Doesn’t Want To Be Cool, It Wants To Be Electricity
FB Identity Services Opengraph Payment Services
Valu
e Ch
ain
Genesis Custom Built Product Commodity/Utility
Social Networking
Different Dynamics
Illustration: Simon Wardley – blog.gardeviance.org
Startups Platforms
Ecosystems
In the Platform phase you must - nurture community
- create community support services - identify emerging behaviors
- model channels to cope with interactions
In this way You increase resilience by enabling peer segments to
create their own interactions inside your platform
In the Ecosystem Phase you must - drive cost down and outperform competitors value
- be cool with utility like consumption patterns - allow new startups/platforms to grow and monitor
use case innovation
In this way You increase resilence by enabling other business
players to create complex higher value proposition on top of your interface*
Innovation happens:
• on top of the interface*: higher value systems (use case innovation) • under the interface*: process maturity, elastic provisioning, measuring (competition) Va
lue
Chai
n
*interface: a shared and commonly adopted or standardized protocol or practice
Arduino Most of the innovation happens above the interface (higher value: smaller size, specific features, etc…) as Arduino has become a standard community of knowledge (interface)
Microduino (microsize)
Flutter (long range)
Smartduino (modularity)
Amazon AWS Established Amazon Machine Images as the ruling interface in cloud deployments. Enabled the birth and growth of several (higher) value proposition. Commoditized specific frequent uses cases (eg: Elastic Map Reduce for big data = now a commodity).
Valu
e Ch
ain
Genesis Custom Built Product Commodity/Utility
Amazon Elastic Map Reduce
AWS Elastic Beanstalk (beta)
AWS OpsWorks
PaaS Currently
built on AWS
Spotted growing
usage
Joining an existing Platform and Ecosystem
(outstanding opportunities)
Typical Stakeholders and contexts: Over The Top players ecosystems
Brand related initiatives Corporate innovation strategies
Open ecosystems (rare)
The App Ecosystem & OTT Platforms Eg: Building Native Apps to be distributed on Android/iOS Marketplaces
Facebook Eg: Using Facebook Connect and Facebook OpenGraph to enhance social interactions as part ofthe proposition.
It’s not only about APIs: corporate players are
increasingly looking for innovation *ecosystems*
Telco players looking for service innovation Manufacturers creating new interfaces and ways to interact with their producs.
Brands with a growing user base looking for disruption. Emerging fields of innovation require a higher experimentation level and inclusive innovation plans
Typical Phases
is about builging
blocks & dev services
is about coaching,
infrastructure & customer
access
is about market
channels & numbers
Eg: APIs and Infrastructures
Startup programs, Events and
conferences, Partner programs
Marketplaces, distribution agreements
Platform Design
Thinking
Grow your startup/product into a Platform (and then, Ecosystem)
Transform from a linear/single gap perspective into multilinear
engine of value creation enabling Peer Segments to co-create value
Community (relations)
Centric
User (gap)
Centric
Platforms target P2P Communities: value creation comes from relations, transactions and exchanges
How to lower Platform opt in cost?
The cost/friction for a user to adopt your
platform and start creating value
It’s a (co) Design challenge
about understanding user contexts and motivations and enabling vaue creation
Some big issues in Peer Platforms:
Marketplace Liquidity Exchange Currencies
Coincidence of Interests Reaching Tipping Point
Some tricks
Start from building single user utility “It might seem odd that systems designed to leverage interactions between people should have single person utility. The first users of delicious were barely aware of and rarely used its social aspects. They just wanted to store their bookmarks in the cloud instead of in their browser. And they liked the tag based classification system. And they liked being able to use their links from any device. That was the single person utility delicious was built on.”
Fred Wilson (avc.com)
Add mutual value
“Users hate spamming friends. It was all fine to begin with when only a few services required them to send out invites but as every new service asks for an invite to be sent out, users get more discerning. Dropbox had a brilliant way around this by incentivizing not only the user but also the invitee when he signs up.”
Sangeet Paul Choudary (platformed.info)
Spillover (across clusters)
Sangeet Paul Choudary (platformed.info)
“The networks with the fastest growth are the ones that freely allow spillover. AirBnB, unlike Uber and OpenTable, has tremendous potential for spillover. The fact that the use case is travel makes such spillover organic to the network. The host and traveler will most likely be part of different city networks. Such cross-cluster interaction allows growth to occur without having to be confined within geographical boundaries.”
Though tricks may work, most of growth problem are contextual:
there’s no one size fits all recipe (though best practices count)
The right approach: methodologically focus on
identifying value exchanges and motivations
Design Thinking &
Platform Design
Understand the basic roles in the Platform
Consumers Producers Stakeholders (platform)
Valu
e Ch
ain
Explore the core value creation relation
Consumers Producers Stakeholders (platform)
Valu
e Ch
ain
Consider that additional roles may appear
Facilitators Curators Information Brokers Enabling actors
Valu
e Ch
ain
Identifying Peer Segments and relations between them and with the platform is key
Mapping Platform Stakeholder
motivations will give you insights on how to overcome chicken/egg problem and
other motivation related design challenges
Peer Relations live through
channels
peers
Channels must be implemented to
facilitate emerging value exchanges.
In platforms, currencies such as trust and reputation may be required to
facilitate transactions and should be clearly valued.
Rel. in June 2013 an iteration of the Business Model Canvas (see http://goo.gl/GAi0K) Key community Feedbacks: - doesn’t show logical value flows - BM Canvas structure not good for non linear business - doesn’t model platform lifecycle - doesn’t help to hack growth
Currently in the works:
Plaform & Ecosystem Design Toolkit
Key challenges
- merging service design thinking practices with platform thinking - no more a single canvas (but a toolkit) - looking to the different phases - multi-sided by design - focused on value flow visualization
Open for contribution (reach out)
3 Takeouts
Work like a Startup solve gaps and hack growth
Grow like a Platform nurture relations and exchanges
Think like an Ecosystem always disrupt yourself
Thanks! Get in touch and hire me for talks
and workshops on meedabyte.com
Follow me on Twitter
@meedabyte workshops & consulting
If you enjoyed this don’t forget to like the presentation!
…and share on Social Media!
Special Thanks to:
Simon Wardley as lots of this is based on his insights Sangeet P. Chaudhary for the exchanges we had on platforms
Raffaele Mauro for the inspiration on trends
Pictures used (Creative Commons):
Thanks Grzegorz Łobiński for the traffic light picture Thanks alphabetta for the cat picture
Thanks USFS Region 5 for the butterfly picture Thanks ben britten for the rainforest picture
Thanks Andrew Feinberg for Zuckerberg picture