The Invisible Competitive Advantage: Healthy Ecosystems

Businesses are constantly in search of competitive advantages. The question that they constantly ask themselves is "How can we be 'the choice' for our prospects as they evaluate products or services that we offer?" Books have been written about how to get and sustain competitive advantages in the short term and long term.

This short piece will cover an invisible competitive advantage that you can develop over the long term—and that is to develop multiple healthy ecosystems that thrive on your success.

Let me give a few examples:

Across the world, Microsoft has more than 600,000 partners that have based their business models on one more of Microsoft's products. They build solutions on top of the Microsoft platform. Every time they succeed in selling their solution, they contribute a piece to the success of Microsoft.

The App Store on the Apple website offers more than 25,000 titles dealing with everything from business applications, maps, restaurant recommendations, puzzles, games, radio, books, and even Skype. Developers from around the world are creating applications for iPhone and iPod Touch, designed to use their advanced technology, such as the Multi-Touch interface. Though most of the applications were developed by third parties, these other companies are enriching the Apple ecosystem every day.

The latest innovation from Amazon—Kindle—thrives on the ecosystem that is created by the publishers, authors, and media companies (yes, they sell newspapers and magazine subscriptions, too). In fact, the Kindle can only be successful if companies other than Amazon contribute to its usefulness.

The same rules apply to other industries outside of software and technology, although most other industries now have some sort of technology associated with them.

For example, selling flowers. Using technology, 1-800-FLOWERS can fulfill an estimated 6 million floral arrangement and gift orders a day—in most cases, on the same day. Obviously, this can't work unless they have a network of stores to fill the orders to the specifications provided by the company. They employ a franchise model and work with thousands of stores across the U.S. Using this process, they increase their capacity as well as the capacity of all the individual participating flower shops.

Ecosystems take a long time to develop, as the participants in the ecosystem have to feel that there is a big win for them for expending their time, energy, and other resources to work within the ecosystem. The long time it takes to build these ecosystems is another factor that contributes to the competitive advantage they provide.

Yes, it takes time and energy to design an offering/product that will not only serve you well, but also serve to take care of the concerns of the participants in your ecosystem. However, that extra effort is well worth it when you look at the competitive advantage this act produces.

[You can learn more about Cool Friend Raj Setty at or read his blog at Life Beyond Code or follow him on Twitter at]

Raj Setty posted this on April 10, 2009, in Strategies.
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