A minimum viable ecosystem for collaborative success

Ahead of his participation at Digital Transformation Asia in November, Swisscom’s Michael Lewrick explains why digital products need a corresponding business model and ecosystem to generate as much value as possible.

A minimum viable ecosystem for collaborative success

Hear more from the author Michael Lewrick, Chief Innovation Officer, Swisscom Enterprise Customers, as he takes part in a panel session AND presents a case study at Digital Transformation Asia in Kuala Lumpur in November. You'll be joining thousands of other executives and enjoying a full calendar of demonstrations, discussions, interactions and ideas.

In the definition of almost every digital product or service offering, design thinking has become a core aspect. Starting with the identification of the problem, followed by the observation of customers' needs, to finally creating a meaningful solution. However, it does not end with the minimum viable product (MVP).

Digital products and solutions also need a corresponding business model and a business ecosystem to generate as much value as possible. A new design paradigm has been emerged recently; a business ecosystem in the form of a minimum viable ecosystem (MVE) must be designed to ensure clearly defined goals and efficient collaborations.

The “Problem to growth and scale” framework (see below) shows the process from a problem definition to design thinking, lean start-up, minimum viable products (MVPs) to the design of a business ecosystem in the form of an MVE, before it is scaled as necessary. The framework can help to apply the right mindset, tools and methods over the entire design cycle.
However, the objective of this article is to investigate the business ecosystem (re)design in greater detail. The definition of the ‘business ecosystem’ has changed and evolved over the last two decades. In the past, many ecosystems referred to a centralistic customer-supplier network with a strong orientation towards a company, or they served a linear customer experience chain. The new digital business ecosystems often have no center and many partners act equally in the network.

Companies that have already successfully designed business ecosystems are generally strongly focused on the customer, but also have the mindset to generate a fair value for each participant in the system. Usually, the partners in the business create value through a coordinated value system that is accepted by all. Together, they can define cross-industry offers.

The customer plays a central role, benefiting from the simplicity and positive experience of the coordinated range of services. Well-known digital ecosystem designs from the last decade come from such customer-focused companies like WeChat, Amazon and Apple. Currently, the next level of ecosystem design finds relevance in the creation of decentralized blockchain applications. Especially in cases in which a token is used to exchange digital assets or values, the design and economics of such a decentralized system becomes essential to sustain success.

The business ecosystem design canvas

A business design ecosystem canvas illustrated below is a useful tool for designing business ecosystems. The canvas contains the most important elements of the loops for an iterative approach in the development of a business ecosystem. It explicitly addresses the needs of users, the actors in the system, the value proposition, the definition of value streams and the results of prototype tests. It also takes a closer look at the advantages and disadvantages of each player, and provides a multidimensional view of the business models. The focus is on the (re)design of the actual ecosystem.
The central questions in the canvas are:

Needs of users/customers
Who is the customer or user and what problem should be solved?

Description of the actors
Who are the actors in the system and what is their role?

Analysis of advantages/disadvantages per actor
What are the advantages and disadvantages for the actor in the current and in a future system?

Core value proposition
What is the value proposition for the end-user?

Definition of value streams
What are the current and future value streams?

Prototype, test, improve ecosystem
With which MVP do we start exploration in the MVE?

Multidimensional view of business models
What are the compelling business models for every player in the system? Design/redesign business ecosystem

Design/redesign business ecosystem
At the core of the canvas, the ecosystem is visualized and the actors, processes and value streams are defined. In addition, the actors are placed on the map indicating their expanded and complementary offers, their key functions and the relation to other actors who are directly or indirectly part of the system.

The key question in this context is:
Which actors are central to service/product delivery in the business ecosystem?

The canvas supports the work in the three ecosystem design loops

The canvas is part of the business ecosystem design process, with ten stages broken down into a ‘virtuous design loop’, a ‘validation loop’ and a ‘realization loop’. The loops are interconnected and the work is performed in iterations – read detailed descriptions about these step in my previous blog for Inform.

The central starting point for ecosystem (re)design is to focus on the customers and their needs, needs which help to create a defined problem statement or a working MVP. Firms can apply well-known design thinking tools such as customer experience chains, customer profiles and personas. The design of the ecosystem usually takes place on two levels: customers, and business.

The characteristics of a MVE

A MVE has the following characteristics and follows the underlying idea of an MVP:

  • All actors seeing benefits in the vision of the MVE create the value proposition together

  • The MVE has enough value for auteurs in the system to start with

  • The MVE demonstrates enough future benefits to retain actors

  • The MVE provides a feedback loops to guide future development

  • The MVE involves a minimum of one actor of each market role to pilot and improve the system and value streams

  • The MVE definition is more complex and thinking in systems becomes key

  • A multidimensional perspective on the business models is needed to attract actors and generate benefits for them