Building a market leading ecosystem? 

Here are the 4 questions you should ask yourself.

When building your own ecosystem, there are so many factors to consider when evaluating any growth strategy before committing resources and time to develop it.   The relative “newness” and complexity of the ecosystem approach may make it even harder to rationalize or envision.

In order to help demystify the concept and look to someone who’s done it before, we joined Jessica Pankov – senior director for ISV Platform & Ecosystem at SAP Concur – in a conversation to offer some insights into her own experience building and developing a top partner ecosystems in her industry.  Jessica’s extensive career in sales and marketing offers an informed perspective about what’s effective and what isn’t when it comes to generating product buzz.  It was interesting to hear that her #1 go-to-market strategy is partner ecosystem.  This is where companies can have a competitive advantage if they are able to execute.   

The Amplifying Power of an Ecosystem

“You can do a zillion clever campaigns, you can try to build every product feature that every customer has ever asked for, and all of that’s great… but, it is never going to get you the multiplying effect that an ecosystem will.”

Jessica’s enthusiasm for the ecosystem play is clear.  Advertising and product offerings may not be able to break through the noise generated by all the competition in your industry.  It’s difficult to differentiate your company from others when all players appear to offer the same things.  But when your partners are telling their customers about your products, services, and how they integrate with the products and services they already know, love, and trust, the ecosystem is providing a competitive edge traditional marketing channels simply can’t match.

“When you open yourselves up in really smart and clever ways to allow organizations outside of your own to build to your APIs, build against whatever gold dust you’ve got in your business, and you allow them to tap into that,” Jessica says, “the multiplier effect is tremendous.” 

Timing  – Get there first. 

“The one who gets to market faster with building up ecosystem, you kind of consume a lot of resources from those organizations that want to partner.” 

Jessica’s point is not lost on the savvy: if you create the relationships first, nurture the connections, and keep the partner’s attention on you, there’s no time for that partner to work with your competitors.  She describes this scenario as a “tornado effect”, pulling everybody into your dynamic environment.   

And if you’re worried the tornadoes have already passed through and swept up all the partner opportunities, don’t be.

“That really is not the case,” according to Jessica.  “There’s still a lot of industries that are really nascent for this kind of ecosystem play that haven’t built them out.”

The 4 Questions

Jessica shared that in her first year working on building the ecosystem program at SAP Concur, she had a good laugh about the energy devoted to debating the inconsequential.

“What are we going to name the tiers of the different partner levels, like gold and platinum?” she asks in a slightly ironic way.  “I’ll tell you, at the outset, don’t worry about it.”

Instead, keep in mind four strategic questions she believes are important to address when starting out:

  1. Volume vs Value – Should you pursue more partners in order to build the ecosystem quickly, or be more selective with whom you partner?
  2. Revenue vs Speed – Do you build the ecosystem at a minimum of expense for your partners just to get things moving, or do you monetize immediately to create revenue?
  3. Brand vs Engagement – Do you get the exclusive big name brands or do you open up to work with smaller partners?
  4. Innovation vs Solutions – Do you focus on making the sexy new product, or do you provide the mundane – yet essential  solutions that address everyday industry problems?

In short, Jessica’s recommendation is BALANCE: it’s important to implement a balanced approach when contemplating the strategic direction for your ecosystem. Focus your energy and attention evaluating where your biggest returns are coming from, which partners are creating the most impact, and setting aside those partner relationships where the juice isn’t worth the squeeze.

“The way that we always said we’d run our program is that it’s a meritocracy,” Jessica says. “Spend your time with the partners that are generating value for you, and where you’re jointly building value for customers.”

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