Cleve Gibbon

In the traditional business model of producers and consumers, a company takes on the sole role of the producer, selling products and services to its customer base.   However, digital can massively disrupt this traditional way of doing business.  Instead of a company being the single producer selling to its one well understood consumer, everything is multiplied.  In this new digital ecosystem of multiple producers and consumers,  those that are leading the charge are accelerating away from the laggards at a staggering pace.  We’ll refer to the leaders as SAUNA companies and in this section we examine what makes they successful.

The SAUNA Companies

 

When we refer to the term ecosystem in this context, we are talking about all the participants that work together to conduct business.  Where these new digital ecosystems differ from more traditional ones is that:

1. There are multiple producers. The company is no longer the sole producer of products and services.
2. There are multiple consumers.  The business better segments and targets different types of customers.

The ecosystem is comprised of multiple producers that need to be matched with multiple consumers.  Working within these digital ecosystem is a radical shift from the command and control mindset associated with traditional models.  The ecosystem is a network entrepreneurial producers with their own wants and needs.   If you don’t understand who’s playing in your ecosystem, cater for their needs, they will simply play elsewhere.  In this ecosystem, the company needs to balance the needs of producers in much the same way at it does for its consumers, maybe more.

Some of the biggest digital ecosystem success stories are the brands we all have come to know and love.  Spotify, AirBnB, Uber, Netflix, and Amazon, or SAUNA are our digital staples.  They have embraced these new digital ways of working both for and with producers and consumers.  The competitive advantage held by these SAUNA companies is what the laggards are desperately seeking to emulate.

The Digital Ecosystem

 

The digital ecosystem is simple in theory but complex in practice. The competitive advantage comes from:

1. Deeply understanding the interaction between producers and consumers
2. Where and when value gets exchanged
3. Delivering the best experience at every interaction.

Value exchange is an ongoing journey.  It’s a closed loop set of steps from the moment a consumer requests value to point at which they receive it back from the producer.  You have to close the loop in order to get the feedback and put those learnings to work in order to improve the next value exchange. SAUNA companies have aggressively sought to create, design, build and measure the high priority value exchanges between all the producers and consumers.  They are relentless in their pursuit to better understand what’s going on with their ecosystem.  Constantly collecting data at every interaction. Turning data into information, deriving insights, crafting new ideas to drive business impact. Data-driven thinking is at the heart of these SAUNA companies that proactively manage a society of well-mannered producers and consumers.

But taking a step back here, what kinds of questions are SAUNA companies asking themselves in order to build actionable hypotheses to test if their thinking is right? How do they ensure they have a healthy digital ecosystem? Imagine you are Jeff Bezos, right now, what questions keep you at night about Amazon?

• Do we really know our producers and consumers?
• Where do the key value exchanges occur?
• How do we deliver better customer experiences at every stage in the value exchange?
• Can we nurture and grow the business to support these value exchanges?
• How can we best serve producers and consumers?
• What and where do we invest in the business platform to grow our platform business?

Difficult but important questions to answer.  However, the first question is critical.  Do you really know the producers and consumers in your ecosystem?

SAUNA Producers and Consumers

 

As a example, take at look the producers and consumers for our SAUNA companies below.

Company	Producer	Consumer	Description
Spotify	Artist	Listener	Matches listeners and artists. Spotify nurtures a community of well-mannered interactions through amazing customer experiences delivered through the web, mobile, and multiple devices.
AirBnB	Host	Traveller	Captures data from every interactions through ratings, reviews and comments to better understand and optimise the future interactions. Airbnb is now the biggest hotel company in the world, although they don't own any properties.
Uber	Driver	Rider	Simplifies the experience and extends its reach across increasing channel types. Uber is just a software tool, they don't own any cars, and are now the biggest taxi company in the world.
Netflix	Media	Viewer	Continually innovates optimising its customer experience resulting in increasingly meaningful interactions.
Amazon	Seller	Buyer	Brokers traditional relationships between buyers and sellers, delivering it through amazing customer experiences to drive competitive advantage.

Pretty clear, right? These are the producers and consumers that as customers engaging with these SAUNA we have come to know and love.  This customer view is only one side of a the digital ecosystem.  The other side, or the enterprise view, looks at the participants within the ecosystem that a company works with to enable the producers and consumers within the customer view to conduct business.  Behind the scenes, they are a whole hosts of agencies, partners and vendors within the enterprise view of ecosystem that need to be catered for.  Let’s take a look at the other side of the ecosystem.

Where next?

 

• BACK: Who are your producers and consumers?
• AHEAD: What are the two sides of an ecosystem?
• HOME: The start of the Business Platform series