Introduction:
Recently, business ecosystems have emerged as a way for networks of organizations that create incredible market value. Through collaboration and competition, an estimated $60 trillion in annual revenue is set to be redistributed. This will happen by the time it is 2025. But when a business operates through a business ecosystem, it does not guarantee success. Moreover, less than 15% are successful in it, in the long run. Lack of trust and wrong governance are the basic causes for the failure of an ecosystem.
How the brand Beepi suffered:
Let us study the failure of the digital car buying and selling platform called Beepi. In 2015, Beepi had a value of about $546 million. It allowed customers to buy inspected used cars with the touch of a button. But as it was new in the market, consumers did not recognize the brand. In addition to this, they did not trust its inspectors or sellers. As a result, the buyers hesitated to purchase a car without testing the car themselves.
Eventually, the company was unable to scale since it did not have the customers’ trust. They folded in 2017 and failed to fulfill the promise of industry disruption. Blockchain is emerging as an ideal arbiter. It provides a decentralized and impartial ledger that no actor can control.
How engagement deepens:
Therefore it offers guarantees that encourage participants to join or deepen their engagement with the ecosystem. It oversees all the transactions and ultimately maximizes its value proposition.
Ecosystems require a referee:
An ecosystem is made up of a network of actors. These actors include suppliers, distributors, customers, agencies, and competitors. Ecosystems are dynamic communities where the participants coevolve through collaboration and competition. The inner workings of these networks closely mirror the dynamics of a team sport. They have disparate players that need to work together to enhance their value proposition. This way they can thrive and earn considerable profit. Yet about $50 million of capital is lost each year because of ecosystem failure.
How expansion maximizes value creation:
The value network needs expansion and should consist of active participants for the maximization of opportunities for value creation. The ecosystem falls short to realize its full potential because of the absence of foundational capabilities.
The new players and partners are attracted when the foundation of trust is strong. New actors don’t consider joining when there is a lack of trust. This happens regardless of the vision of the ecosystem. With few participants and resistance from companies to join, the ecosystem network struggles to grow. The need to successfully monetize. Without trustworthy principles, the monetization and revenue sharing model becomes questionable.
This is where blockchain plays a vital role. It acts as an accurate middleman because of the decentralization of the system. Moreover, nobody can own or operate the system. As an impartial ledger, it provides partners the confidence to operate the ecosystem. This happens without the fear of illegal and unethical practices from other participants.