Play Well in the Ecosystem

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Plays well in the ecosystem.

I am astounded how many times great innovation is built in isolation from where it is going to get integrated. This is the whole reason enterprise software is so hard: people find it so hard to implement. You have heard the term shelfware; shelfware happens because people do not think about integration up front. So think about it up front: reduce the pain for customers to try, adopt, and deploy your product by installing easily and integrating well.

Embrace and extend. Microsoft, when it was behind on the web, adopted a strategy called embrace and extend: they figured out how to embrace the web and extend what everybody else was doing, rather than trying to take over the browser initially. It was a great strategy. Embrace what everybody already has as a business process, product, or infrastructure, then extend it.

Open and extensible / open APIs. Open and extensibility has become a whole way of building products. The growth of open APIs is taking off; when Greg was trying to get his OpenGL API out, an open API was a big deal, and today there is an open API for almost every web service. Instead of building everything, figure out how to integrate with all those RESTful APIs. Why would you ever build a payment gateway? There are many ways to integrate PayPal or other gateways used by thousands of merchants. You do not need to build it; you can just use it, and you will be much more easily integrated into people’s workflows.

Change is risky: an assumption to make. Here is one assumption I want you to make: change is risky, painful, time-consuming, and costly, especially in the enterprise, but even for consumers. Imagine your incumbents are applications, operating environments, business processes, or, the biggest one of all, humans. People just do not want to adopt new processes; if they have learned a way of processing an order and you tell them to learn it completely differently, you are putting up a barrier and creating a cost for yourself. Learning to operate a 3D instrument is hard; we looked at a haptics company (an MIT spinout) where the problem was not technology, it was training people to use it for real applications. So always think about how to make your product install easier, and let products that integrate and play well with others encourage adoption.

DemandWare’s LINK program. E-commerce is a complex area, so we focused on building the platform, but we knew we would need to integrate with everyone involved: back-end order processing, custom fulfillment, and, at the front end, marketing and experience management. So we created an open API and an open program called the LINK program, making it possible for others to integrate with us and us with them; we even started with pre-integrations. I am not suggesting you build all that up front, but I am suggesting you think this way up front: how might you create an open, extensible platform that integrates well with whatever is in your customer’s hands?

TetraScience. A local company out of Harvard Business School that builds a cloud for the life sciences, connecting all the research devices and collecting data from them. When you look at the ecosystem they play in, the complexity is enormous, and their explicit strategy is to be the cloud that ties all these disparate platforms together and be a clearinghouse and central point. That involves partnerships and technology integrations with many companies; it is an example of a company that was explicitly about being a player in the ecosystem.

Klaviyo and Shopify. Playing nice in the ecosystem does not always mean being the center cloud. A local company, Klaviyo, does SMS marketing, selling to e-commerce customers so they can text their customers. To do that, they needed both technical and business partnerships with all the wireless carriers to send messages over the network. But the thing that made them a billion-dollar company was their partnership with Shopify. They started as a feature in Shopify, and along the way Shopify blessed them as the default, “preferred” marketing and SMS platform. Boom, a unicorn was born. (An audience member who does e-commerce consulting confirmed it: the highest-tier Shopify store owners, in their paid CEO communities, kept telling each other “use Klaviyo,” so it was a combination of rising tides, word of mouth, and then a tight partnership.) Partnerships can change the trajectory of your business: a hardware manufacturer, a furniture manufacturer, a textile manufacturer, whatever your business is. That is the P in SLIP, playing nice in the ecosystem.