Mastering the Art of Smart Product Ecosystems

Even the smart products are not going to create market leadership in today’s ultra-competitive, technology-on-steroids market.  Companies need a smart ecosystem to leverage their products into a sustainable, profitable strategy.  Whether a manager wants a framework for developing smart product strategies, is wondering whether to join some other company’s smart ecosystem, or needs to understand the value of products enabling smart services, it’s essential to understand ecosystem options.   Here are five important considerations for developing smart ecosystems:

1) Create an integrated, interconnected platform for delivering innovative services that will quickly scale the value of your smart product for ecosystem partners and customers.

2) Partner with an established power base in the industry where you are focusing first – this power partner can be a connectivity provider, a customer channel, a premier source of content or play some other critical role; chose carefully and make the best deal you can. 3) Create new revenue streams from disrupting someone else’s business model, but share the wealth strategically to lock in loyalty.  It’s OK to squeeze market leaders to improve your margins as long as some of your new ecosystem partners are becoming visibly and dramatically richer in the process. 4) Make your customers full ecosystem partners, not just marketing and revenue targets.  Review whatever you are already doing to create active customer roles inside your inner circle and invest in making that process better, broader and more open. 5) Develop a cross-industry strategy from the outset.  Smart products and services are driving industry convergence at an ever- faster pace.  If you aren’t already thinking about how your ecosystem can partner across industries to replicate its model in another market space, you will be blindsided by convergence-savvy competition.