Autumn is one of the most creative seasons. I love walking into the colorful forests near my place (and yes, also preparing for Halloween 👻 ). I led a workshop this week to promote ecosystem-led growth around predictive maintenance in the Basel region.
I realize this concept is still not widely used, while it is core to innovation today. So here you will get the definition, the benefits, and how to take the 1st step. This is the new competitive advantage : it's where sales, innovation, and community converge to create unparalleled value (yes I am not exaggerating 😅).
Get comfortable for your 5 minutes of sparks to hack.
Ecosystem-led growth (ELG) is the new competitive advantage; it's where sales, innovation, and community converge to create unparalleled value (yes I am not exaggerating 😅).
✏ What is Ecosystem-led Growth?
It is a business strategy focusing on creating a network of interrelated businesses. It encourages collaboration and co-creation of value and prioritizes long-term relationships over short-term transactions.
The Mayo Clinic Care Network aims to help physicians work together to enhance the delivery of healthcare for patients, no matter where they live. "Your patients have you. You have Mayo Clinic".
- Mayo Clinic: by affiliating with local hospitals and clinics and other helathacre providers. It can extend its expertise to a broader audience without expanding its facilities physically.
- Patients: gain access to top-tier medical advice and care without traveling long distances.
- Independent health care providers: benefit from Mayo Clinic’s expertise, resources, and reputation to attract more patients.
✏ Similar but different than partnership
While large partnerships in corporate are led by business development & licensing or Partnering divisions, ELG is a smaller-scale partnership that startups, countries, and affiliates from big companies and hospitals can design and execute.
The goal is to shift the focus from direct sales to Ecosystem-Led Growth.
✏ The benefits
Here are the 5 benefits :
- Resource Abundance: Minimize upfront investments with shared resources.
- Increased innovation and faster problem-solving.
- Enhanced customer value and satisfaction leading to shorter sales cycles and increased conversion rates.
- Market Magic: Gain rapid market entry with a ready-made customer base, faster growth and scalability of the business.
- Knowledge Exchange: Accelerate learning and innovation through interaction with industry experts.
- Risk Division: Distribute risks and create a safety net through partnerships.
The figures are impressive (Crossbeam in the Partner Ecosystem 2023 report - US): deals close 46% faster when a partner is involved; deals also have a 53% higher likelihood of closing when a partner is involved in the negotiation and users originating from an integration partnership are 58% less likely to churn as customers.
✏ More companies embrace this strategy, but still limited
We have seen an increase in these partnerships since 2019, mainly among Saas products. Here is the % of Saas companies sharing account-level customer data with a partner.
We see a signifcant increase in Saas companies sharing account-level customer data with a partner (the ultimate measure of trust among partners). So there is a shift toward more ELG, but this remains limited (today 5%), so it means it is full of potential!
Here are simple steps to shift your focus from direct sales and channel to ELG.
✏ Building Your Network and an Ecosystem Mindset
Dive into the world of ecosystems by identifying potential partners and collaborators. How often do you attend events in your region or contribute to open innovation challenges like Hackathon? (😱 I used to prioritize doing internal work vs external connections - don't make the same mistake as me) !
Teams must foster a willingness to collaborate and share value (not so easy) and be open to change and adapt. As with partners, your plans are even more likely to change 😅.
✏ Identify opportunities: ecosystem mapping
Ecosystem-led growth is about understanding that your business’s success is interlinked with the success of your partners, suppliers, and customers. Look for synergies and shared goals to ensure a mutually beneficial relationship.
So with the digital heath startup you started collaborating with: how aligned are your goals? How do you share insights? What is the revenue split?
With a critical hospital account: in your account planning, do you have their yearly goals? Do you know their KPI and have investigated ways to help them by partnering with another company?
For the private insurance you engaged in conversion with, what could be a product that would benefit both parties?
For example in our Bambooster academy (here if you are curious 😉), we have the Eye exercise: "Ecosystem You Evolve" in mapping.
✏ Ecosystem Operating system.
This is great for identifying opportunities, but then you need to be able to execute. You need a repeatable, sustainable set of practices for working with your partners and internal stakeholders and scaling your partnerships program.
1 - Leveraging Technology: Utilize technology to connect with your ecosystem, streamline collaborations, and track your progress. Tools like CRM systems and collaborative platforms can be pivotal in your ecosystem strategy.
2 - Clarify roles and process: how often do you share with your partner, what data do you share, and what are your success metrics?
✏ Navigating the Challenges
Be mindful of the potential pitfalls of ecosystem-led growth, including the risk of dependency and the need for effective communication. Develop a clear strategy, set boundaries, and ensure your partnerships are built on trust and transparency.
So, are you motivated to shift from focusing on direct sales or " we build everything in-house" to ecosystem-led growth?
I hope so 😉!
Hit reply to let me know if you liked this edition or if you tried these tips. I respond to every person who writes to me!
See you in two weeks. Keep the spark alive, and be intentional :)