Offering the right product and service to the right customers in the right market and at the right time is half part of being in business. The other half is having the right partners, technologies, and strategies to help you reach the market and deliver your products and services.
The most successful technology ecosystems help you bridge the gap between customers, partners, products, technologies, and markets to help you deal with your responsibilities and innovate at a much higher rate. But how do you get started on creating a tech ecosystem?
At Vation Ventures, we frequently refer to our tech ecosystem to encompass our diverse group of technology leaders, venture capitalists, channel partners, entrepreneurs, and end customers. In this article, we’ll define exactly what tech ecosystems are, players involved in the innovation process, and why being part of the tech ecosystem is essential.
What is a tech ecosystem?
An ecosystem is a community of complex networks of interconnected organisms or systems. In living organisms' case, it entails how they interact to form relationships in communities that provide security, food, shelter, emotional and physical support.
On the other hand, a tech ecosystem is a network of interconnected and interdependent diverse business entities. They come together to support each other and spur innovation sustainably.
Many people understand the term ecosystem as it pertains to living organisms. But, in a Harvard business review article, business strategist James F. Moore suggested a definition of ecosystems in a business context. His mold-breaking suggestion implied that businesses don’t just exist as single, self-reliant entities but as part of an ecosystem that directly or indirectly supports each other.
He inferred that businesses would co-evolve instead of separately existing in a bubble and share common resources, ideas, and technologies to enable mutual growth. Today, the ecosystem concept has continued developing and gaining new meaning while still building on James’s ideas of streamlined progression of development and unity.
And just as James suggested, businesses that come together to pull resources and develop common platforms to achieve their objectives have higher chances of growing substantially than those that don’t.
“Connecting the technology ecosystem is incredibly important because it compresses the time it takes to get innovation into the hands of customers. When all segments of the ecosystem have open lines of direct communication, challenges are solved faster, innovation reaches the customers better and faster, and continual growth and evolution of technology is fostered. Technology is evolving at such a rapid pace, and the ecosystem needs to be there to support and embrace it.” -Jessica Stone, Partner
It might seem impossible when starting, but taking incremental steps to build your ecosystem is one of the single most important things you can do.
Who makes up successful technology ecosystems?
Venture Capital Firms
Innovation is a crucial element in an organization's ability to maintain a competitive advantage and advance long-term growth. . Companies and entrepreneurs have to keep innovating and pushing the bounds of what’s possible now and tomorrow.
VC firms act as the catalysts between innovative new ideas and realizing those ideas. VC firms provide the financial backing and support needed to assist enterprises and entrepreneurs in developing innovative tech ideas. They also help create the products' markets while gaining equity and market share.
“The technology industry has grown up over the past fifty years. During that life cycle, tremendous investments have been made by Venture Capitalists and Private Equity Firms to drive innovation. Similarly, the End Users of technology have invested in order to digitize their internal and customer/supplier facing interactions. Over the last twenty-five years, the channel intermediaries have grown to facilitate the relationship between the innovators and the market. The connection between all the upstream and downstream participants in the ecosystem now needs to be streamlined to compress time from idea to deployment. That's what Vation Ventures does—we provide innovators a path to success.” -Dave O’Callaghan, Partner
VC firms play a crucial role in the innovation cycle by acting as gate guardians who curate what ideas are worth investing in and developing. They challenge innovators to incubate and develop ideas to a mature level for prototyping and market-testing. Their input at the initial stages of any new technology’s development can significantly impact the products and technologies that end up in the market—especially for tech-focused startups.
Emerging technologies are a fresh take on solutions that solve old problems. We constantly find new ways to simplify things and tackle some of the most pressing challenges. At the same time, those technologies present unique challenges that are demanding and require innovations to solve. The results are a constructive cycle of better and better iterations of technologies.
“When you’re in the early stages of building a company, oftentimes the team is solely thinking of their product and their customer. Obviously, two critical focus areas. That said, spending time to focus on building a supportive ecosystem of partners and advisors at your foundational stage can make or break your success. Being able to leverage the knowledge of those who came before you to avoid costly mistakes—both fiscally and related to time—and the third party perspectives can help take your company further, faster.” Jordan Loyd, Partner
Innovations such as mobile money transfer systems have reinvented the wheel of mobile money transfers and banking. Impacting lives for the better all over the world. If more global challenges are also straightened out when emerging technologies push the bounds, we’ll significantly improve people's conditions.
Good leadership in enterprises and a more entrepreneurial spirit from creative people will ensure we keep innovating. And the support and ecosystems around these innovators will help the technologies see the light of day. Enabling creators, entrepreneurs, and emerging technologies to bloom is critical in keeping this part of the tech ecosystem alive.
Original Equipment Manufacturers (OEMs)
Original equipment manufacturers play crucial roles in seeing the success of any new technology and offer the facilities and expertise needed to produce them. OEM services are also vital because innovators don’t have to develop their own equipment and processes to develop their technologies.
Instead, they can concentrate on their core competencies and other aspects of running a business, such as marketing and innovating. Without OEMs, innovators would need to figure out the logistics of developing their technologies, which can be difficult and time-consuming. This creates a massive barrier to entry for most emerging technologies and innovators trying to get into the market.
It would also lead to fewer innovations and longer life cycles of less than desirable technologies. But with OEMs, innovators can quickly model solutions and introduce them into the market for better returns on investments. As you can see, OEMs are essential in any technology ecosystem. They aid in developing new tech solutions and ensure that they are available in the market at reasonable price points.
Distributors in the technology world are an essential link between innovators, solution providers, and end customers. As companies undergo a fundamental digital transformation to capture, leverage, and protect their data, the pace of innovation has increased. Distributors serve as crucial cog in the tech ecosystem, evaluating new technologies and ensuring those technologies are able to be deployed and supported where the customer needs them.
Over the last century, distributors have evolved from component and systems distribution (providing inventory and logistics management at scale) to solution distribution (providing additional value-added services like integration, technical support, and channel enablement).
The next era of distribution focuses on Digital. As the world digitizes everything, the technology needed to support the end users’ transformation will include investments in emerging technologies of Artificial Intelligence/Machine Learning, Cloud/XAAS, IoT, and Security/Analytics for everything. The core value distribution solutions of data center, integrations from the Solutions Distribution era, and the global logistics, quote-to-cash operational excellence from the Component and Systems Distribution era will continue to be core needs of both upstream and downstream constituents.
Having the right kind of distribution can make or break your product. You can experience short-term success or spend most of your time and resources selling and supporting your solution. Distributors with established distribution channels can leverage their technologies and partners to help you expand your sales coverage and reduce your operational expenses.
Online distribution platforms and IoT has also grown in leaps and bounds and viable distribution networks for e-commerce businesses. Distributors have utilized these platforms to reach even more customers, and the internet and cloud-based services have helped them reach more people and optimize their services for a better ROI.
So as you continue your growth journey, be sure to factor distribution into your go-to-market strategy.
Often the last mile to getting innovation to market is the solution provider. By adding their extensive expertise and value-added services, solution providers ensure that technology is appropriately assessed, designed, implemented, and managed. A solution provider is a broad term comprising partners like Value-Added Resellers (VARs), Systems Integrators (SI’s), and Managed Services Providers (MSPs).
A value-added reseller is a company that adds features or services to an existing product then resells it as an integrated product or complete "turn-key" solution.
A systems integrator is a person or company specializing in bringing together component subsystems into a whole and ensuring that those subsystems function together, a practice known as system integration.
A managed service provider (MSP) delivers services, such as network, application, infrastructure, and security, via ongoing and regular support and active administration on customers’ premises, in their MSP’s data center (hosting), or a third-party data center.
These partner types should be considered key routes when building your go-to-market strategy.
Like distributors, solution providers provide increased coverage from both a customer and geographic perspective. In fact, solution providers often leverage distributors for additional capabilities, capacity, and buying power. The bottom line is the bottom line – and both distributors and solution providers can accelerate yours.
Customers can influence the innovation process in one of three ways. They can act as inspiration, initiators, or co-producers. As initiators, they can start the innovation conversation for new products that they have already realized can fix their problem, but the products don’t exist—and challenge brands and manufacturers to develop something to help them fulfill their needs.
Customers can also inspire innovators who create and develop products. Creators can put themselves in customers' shoes to better understand their pain points. Innovators can better design products that provide better solutions by empathizing with them.
And finally, working with customers within your company's technology ecosystem as co-producers of solutions to their needs will lead to innovation and products that better address their issues. Customer feedback and the relevancy of inventions to customers’ pain points are essential elements that only they can help you understand.
Why you need a vibrant tech ecosystem
Ecosystems support growth through pooling resources and sharing technologies and applications developed to boost each other's productivity.
You can align your product or services with those in your ecosystem to develop offerings that stack on top of services or products you don't currently plan to or want to provide to your client base.
It makes building on the existing architecture easier and provides opportunities in unexpected areas and use cases you might not originally be expecting to address as a company.
Not surprisingly, solutions are worth more when utilized by many people than by just a few. Developing a mass solution will benefit more entities and have more monetization opportunities—having the input from your greater ecosystem can help ensure your solution fits the needs of customers you might not yet be engaged with.
By working with others in your ecosystem, you can offer products and services to markets you might not have been able to break into on your own.
For every person or company, you add into your ecosystem your connections grow exponentially. Not only are you building an association with the single company, you are also, through extension, gaining access to that company's ecosystem.
What does ecosystem orchestration mean?
Orchestrating a technology ecosystem requires B2B partners to put each other's interests and their respective customers' experiences at heart. They need to improve their customers' experiences from the interaction within the ecosystem and improve the other group members’ customer experiences.
Relationships will prosper in such a symbiotic environment, and ecosystems will grow. But for this to happen, technology executives should take the steps listed below.
Move from traditional management to ecosystem orchestration
To ensure they get the most out of the ecosystem, they have to consider their ecosystem partners as extensions of their operations and treat them as enablers of new opportunities.
“The power of the ecosystem isn’t the ecosystem itself. It’s the orchestration across the ecosystem that truly drives disruption. Orchestration is the connection. It helps compress the time in solving problems before anyone else does.” -Joe O’Callaghan, Managing Partner
Be Mindful of Their Ecosystem Partners and Their Customers
Developing the right customer experiences requires insight from all parties and minding the well-being of each other's customers and businesses. Taking strategic moves that help each other’s positioning and customer experiences within the ecosystem will nurture trust within the group and deliver value to each other.
Adopt Common Stands for Mutual Growth
Business partners that are technologically and digitally engaged are beneficial to business. Having standard practices and shared platforms will help pool resources to develop them and provide more data points for improvement.
No innovation journey is same, we're here to help build your ecosystem with our ecosystem.
At Vation Ventures, our technology ecosystem is how we see innovation through from start to finish. Building relationships, conducting research, giving expert consulting, and expanding communities connects innovators and gives them the resources they need to keep their organizations on the edge of technology. Our extensive community of technology executives provide unmatched insights into successes and challenges going on right now in the industry.
As the technology industry evolves faster and faster, keeping up can be a challenge. Vation Intelligence offers a unique, tailored approach to research to ensure research is digestible, actionable, and future-focused. With years of experience and irreplaceable relationships built in the technology industry, our team understands the struggles of innovation and works with our clients to help them succeed—because we know that no innovation journey is alike. Interested in discussing your ecosystem and your growth journey? We'd love to talk.
Spread the word.
Thousands of subscribers receive our newsletter every week breaking down what's happening across the technology community.
Join them today.
Thank you! You've signed up successfully!
Oops! Something went wrong while submitting, please try again.