What do you call an ecosystem in which you always see your company as the central actor? An ego-system. This is how we end up with labels such as the “Google ecosystem,” the “Facebook ecosystem,” the “insert-your-name-here ecosystem.” These labels seem impressive at the get-go, but they undermine an important truth: Ecosystem strategy is alignment strategy.
Defining ecosystems around companies blinds everyone involved to alignment hurdles and limits their ability to craft appropriate strategies. The presumption of centrality makes it harder to establish the relationships needed to achieve their goals: It’s harder for ecosystem leaders to create strategies that attract followers, and harder for ecosystem partners to know which leaders to follow and where to place their bets.
Apple offers a stark example. The most valuable company in the world has been enormously successful in extending the mobile data device ecosystem it leads — iPod to iPhone to iPad to Apple Watch, encircled by its App Store and iOS platforms. But it has been shockingly disappointing in its efforts to expand into new businesses that require the construction of new ecosystems. Apple’s failures to deliver on ambitious promises — that health care would be the company’s “greatest contribution to mankind”; that the HomePod would “reinvent home audio”; that its classroom education platform would “amplify learning and creativity in a way that only Apple can” — are concealed by the profits gushing from its core ecosystem, but they are failures nonetheless. The consequences of these failures are borne not only by Apple, but also by all the companies that joined as complementors in these efforts.