While the first levels of Offering Maturity (Product Market Fit and Go-to-Market Fit) are well understood and commonly treated as mandatory milestones in the market’s adoption of an innovative offering, Ecosystem Fit is often overlooked and treated as an optional capability.
Fact is: Without support of a prospering ecosystem of partner products and services, an innovation will not cross the chasm and not make it into the mainstream market where Early Majority buyers expect what Geoffrey Moore coined “The Whole Product”!
But fact is also: Achieving Ecosystem Fit requires a major change impacting the entire organization from product development through aftersales with significant potential for friction.
Here is what Ecosystem Fit requires the offering to provide:
Interoperability
The offering must smoothly integrate and engage with other elements or technologies in the ecosystem. For this it must provide clearly defined interfaces, e.g., APIs, import/export, data access.
Complementarity
The offering must enhance or work alongside the capabilities and offerings of other entities in the ecosystem. It must either fill gaps in other players’ offerings or leverage these to drive additional value for customers.
Compliance
The offering must comply with applicable laws, regulations, and industry standards within the ecosystem, e.g., GDPR, anti-trust regulation, TISAX.
User Adoption
The offering must support preferences, behaviors, and needs of users across the ecosystem, and allow for customization of its components.
Financial Viability
The offering must carry economic sustainability within the ecosystem, taking into account factors like pricing models, revenue streams, and cost structures.
Value Generation and Capture
The offering must generate value not only for customers but also for the various stakeholders in the ecosystem and provide mechanisms for capturing it.
Network Effects
The offering must recognize and leverage the network effects within the ecosystem, where the value of the product or service amplifies as more participants engage with it.
Scalability
The offering must carry the potential to expand and thrive within the ecosystem, factoring in elements like market demand, competition, and resource availability.
Innovation
The offering must carry the capacity to innovate and adapt in response to changes in the ecosystem, including emerging technologies, market trends, and customer preferences.
Strategic Partnerships
The offering must provide prospects for strategic partnerships or cooperative efforts with other entities in the ecosystem to enhance mutual value.
Sustainability
The offering’s engagement model must deliver sustained mutual value to the ecosystem to promote the acceptance and success of the product or service.
Culture
The offering must support norms, social behaviors, and values that impact user acceptance and adoption within the ecosystem.
What Great Looks Like
Let’s look at an enormously successful example for Ecosystem Fit in one of the most disruptive offerings of all times: AWS public cloud services launched in 2006.
At the time of launching AWS had Product Market Fit and Go-to-Market Fit for individuals and startups capable of consuming its services via APIs. Pricing was consumption-based, all a user needed was a credit card to open an AWS account. Customers were not allowed to resell AWS services or provide access to AWS services to users outside their own organization except for implementation and operations support. At this time AWS had no Ecosystem Fit.
It took AWS until 2012 to launch its partner program APN and quickly expand it in typical Amazon style introducing new programs in a yearly cadence since then. Starting with a couple of hundred initial partners the program grew to more than 100,000 partners in 150 countries within just 10 years.
AWS's aggressive ramp up of its ecosystem was crucial for crossing the chasm with enterprise accounts between 2014 and 2016 and by the time I left them in 2023 the majority of AWS’ $80B+ revenue was partner-influenced.
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