Why Disruption Is All About Ecosystem Thinking
Businesses and platforms need ecosystems to encourage economic development It is almost a decade now since Apple launched its App Store, created a new developer ecosystem and accidentally changed the...
Strong customer segmentation
Airbnb has been appealing to a broader and broader segmentation over time. Initially it offered rooms, then whole apartments or houses. Natural segmentations existed in rural/urban and specific locations. The move into selling experiences allows it to refine this into a new kind of customer segmentation defined by customer interests (cooking, exercise, fitness, water-based, beach, mountain etc). As yet Airbnb seems to make very little of the data it must be compiling around interests but leaving that to one side it has wonderfully dynamic customer segmentation. It is now moving into upmarket condos in countries like Japan where it can offer the facilities you would expect on a long-haul vacation (swimming pool, gym etc).
Content and collective intelligence
Airbnb began with the typical platform content offer: reviews. This strategy has powered Amazon and many other companies and is an essential, though corruptible, element in trust building. But it has gone on from there to create travel and activity guides written by its Experience partners. It has access to the infinite travel guide to the world because it has members everywhere.
Third parties create conferences and workshops to promote good practice in the Airbnb ecosystem. These include seminars on property photography, how to advertise, maximising revenues (e.g. through cleaning fees), managing multiple properties, and using third party services.
Third party business development
That leads us to the range of businesses that now thrive in the Airbnb ecosystem but which are entirely independent of it. These include services like keyholding, guest reception management, cleaning services, photography and beautification, rental management software and dashboards, search engine optimisation, laundry pick-up, and management training.On top of that Airbnb has relationships with Telcos who preload its app on their phones and with construction and development companies that are looking to create accommodation that suits Airbnb’s new target markets.
Free long tail tools
Ecosystems have to be supported by free tools that take friction out of doing business on a platform. Google does this with Google analytics and trends. Airbnb provides accounting and management software tools to renters. In addition Airbnb is looking into the area of home improvement loans, taking it into the domain of financial services or offering up ways to use its data to de-risk loan decisions for partner banks.
Powerful adjacency moves
Finally, you see the scope for adjacency moves. Moving into travel experiences and restaurants are two interesting ones for Airbnb but the potential exists for a move into financial services and property development too.
In using Airbnb as an example I hope to have illustrated that an ecosystem is far more than a community or a group. It is a series of interdependencies that enable business development among people in the ecosystem. Often these people have no direct contractual relationship. They prosper by creating ecosystem elements that become integral to how the ecosystem functions. There is a natural form of pollination that takes place and business expands.
There are other examples we could have looked at. Alibaba and its Ant Financial and Alipay subsidiaries is one of my favourites but space is limited. Airbnb has changed the way people travel, is altering the way people view their physical space, is redefining how we vacation, and with more time will change the way cities are organised. It is also generating huge aggregate wealth for millions of people.
Alibaba is going much further than this, training people in rural China to become online businesses and creating huge numbers of jobs. In the process it is creating a global payments network to facilitate, initially Chinese travel but which will become in time an alternative global payments network for Chinese trade. These are the real disruptive networks effects of business ecosystems.