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Framing the Platform-Ecosystem Space at the dawn of 2022

BOUNDARYLESS CONVERSATIONS PODCAST - SEASON 3 EP #6

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BOUNDARYLESS CONVERSATIONS PODCAST - SEASON 3 EP #6

Framing the Platform-Ecosystem Space at the dawn of 2022

In this special “Boundaryless update” episode, we explore some of the patterns witnessed consolidating over the past ten years with regards to marketplaces, embracing shared infrastructures, the dynamic new role of connecting with customers, building extension platforms, Amazon’s open marketplace doctrine, and the future of ecosystemic value creation.

Podcast Notes

Extended key highlights

 

Products as networks in digital ecosystems

Since a while now, we are witnessing a consolidation of patterns when it comes to platforms and ecosystems: as a consequence, companies ought to think about their products from a portfolio perspective. We are moving from products isolated in a product-customer relationship, towards value propositions nested into wider digital ecosystems that help producers of value to attract and serve more customers. At Boundaryless, we are crystallising this new playbook for products in a new frame of reference, which will be released gradually this year to serve as a sort of “atlas” for you to explore opportunities and frame products and services. Three interrelated concepts make up this complexity: each product system should be framed as a core offering – a product/service bundle, one or more marketplaces, and potential extensions driven by third party developers, extending the product features. 

Using the example of a Software-as-a-Service, considering SaaS as the core value proposition of a company serving the needs of a certain group of users (typically providers of value in an ecosystem), these value providers in turn have their own customers and networks. In other words, they are interconnected with other arenas, workflows and jobs-to-be-done beyond that core SaaS product. In order to unleash this full network value potential, bundling a marketplace together with the core SaaS offering is a pattern that can help those “other” relationships thrive and producers to gain more customers.

Salesforce AppExchange and Shopify showcase this, namely how connecting a marketplace of advisors and specific skills can help improve a product beyond customer development, with aspects like branding, marketing, and so on. Financial services is another burgeoning area helping marketplaces to generate more value by creating trust and reducing risks related to transactions (listen to Dealroom’s Ivan Draganov for more on this). 

But the marketplace pattern does not stop at the D2C value exchange enabled by traditional marketplaces. Even the core product – i.e. the SaaS or service bundle – can be extended by opening up to third parties and using the marketplace to target developers. Following what Simone refers to in the episode as the “Reverse API paradigm” – the core product can connect to other products using the same user interface, for example like Apps to deploy in a Shopify store (e.g. CRM or loyalty). This extension logic can be applied also to data and algorithms, as well as hardware. 

 

The drive for openness 

Adopting the above frame of reference certainly requires organisations to develop the right mindset and literacy – they need to understand patterns. If no one understands marketplaces and developer communities (extension providers), it will be difficult to apply the new product playbook for an organization. 

This further entails breaking down silos and looking at the organisation as a portfolio of products. It is likely that products have overlaps, where one can generate demand for another. This should not be seen as a threat, but a possibility to plug into a “spillover-growth” perspective and create value faster.     

In modern organizations, teams need to be empowered to explore ecosystemic value creation. At Amazon, Bezos famously enforced business units to connect to each other through programmable interfaces: it was that or – quite literally – to “f**king off”. As teams were no longer bounded by the inside, people running the marketplace saw little difference between connecting with inside or outside product category providers – this is what enabled the Amazon marketplace to become so powerful so quickly. 

As pressure mounts to make the best of these powerful opportunities, openness must be sought and siloes torn down. The positive outcomes of opennes can thus be partly achieved through policy (this has been explained at length by Marshall Van Alstyne and Geoffrey Parker), but as builders of products and services, we need to embrace a new paradigm: that of outcooperating the competition, borrowing from Gregory Landua. The issue here is to make products so cooperative and integrative that it no longer makes sense to compete. And this is the mindshift that is currently taking place, which Boundaryless aims to support.   

 

Implications for organisational development and business models

The above patterns also have implications for how firms and markets organise, especially as we move beyond the industrial era into a theory of post-industrial organising. This is something that Boundaryless is exploring together with Haier Group through the 3EO framework – and more specifically by building the EMCos, an ecosystemic contracting software, that will allow contracts to be the core organising element inside and between organisations. In practice, the software will enable small teams to dynamically connect and create new products and services together, and to share the incentives and rewards.

Open interfaces will characterize the future of building for ecosystems: once you agree on the protocols and domain model it’s easier for many different players to interface to the same – open – system. Data and info sharing? We’ve to go beyond centralized databases: Blockchain tech can help, as shared consensus ledger options are constantly improving. Cosmos SDK for example – is an interesting interchain project that we believe is representing interesting developments in the space. Once such an approach will consolidate, we’ll see different providers developing multiple solutions that will be able to generate advantage and network effects but will still be able to communicate among each other: the pressure for efficiency and openness will reduce competition at some layers in the system, still leaving space for developing unique value propositions.

What is exciting is that – despite its complexity – the type of dynamic contracting described above is increasingly moving into a more accessible space. What is needed now is for the design tools and practices to form, like the platform-ecosystem design practice that captured the new trends enabled by the last technological shift ushered by the Internet. 

Such new decentralized technologies are also enabling Web3 patterns to enter the space of platforms and marketplaces: we do not have the tools and practices yet but pioneering networks like Braintrust (listen to our amazing episode with Gabe Luna-Ostaseski for more) are bringing new patterns to the forefront, enabling platform designer distribute key functions such as onboarding, vetting and bidding to the network of participants incentivised through tokens. Financial staking, governance tokes, and other crypto primitives are helping us mix user experience, software development with economic space design: this is just the beginning. 

Vetting, for example, can be done centrally (which is typically the case) or by the community, like they are experimenting with at Braintrust (in exchange of governance tokens that let participants express their guidance for new features of network configurations). Staking is another Web3 process that can mix well with the bidding phase of a marketplace: the more you stake the higher signal you send to the marketplace. Exciting things will happen when we learn to do this from a design practice perspective. It will make it hard to compete with such embedded community control from a value extraction perspective.

Finally, and thanks to all this, we are witnessing a move away from the consumer perspective that dominated our industrial economies: we predict that the producer perspective will become more and more dominant, with more investing in the long-term and more skin in the game for designers, developers and participants. 

And who will these producers of value be? The answer is: everybody. It is up to each and every one of us to participate, noting the “end of delegation” as Simone recently wrote on the Doomer optimism manifesto. We have to recognize that decentralization won’t come from the center. 

 

References and mentions:

Find out more about the show and the research at Boundaryless at https://boundaryless.io/resources/podcast/

Thanks for the ad-hoc music to Liosound / Walter Mobilio. Find his portfolio here: https://boundaryless.io/podcast-music

Recorded on 7 January 2022.

 

🌐 Boundaryless Conversations Podcast is about exploring the future of organizing at scale by leveraging on technology, network effects, and shaping narratives. We explore how platforms can help us play with a world in turmoil, change, and transformation: a world that is at the same time more interconnected and interdependent than ever but also more conflictual and rivalrous.