Written together with Anna Bon. Photos by Ana Bon and Bruno van Moerkerken.
Business ecosystems are complex systems of stakeholders who depend on each other for their survival and well-being. Stakeholders in an ecosystem are free to pursue their goals but the choices they make impact others in their ecosystem.
How do you develop business ecosystems if stakeholders may withdraw any time? How can ecosystems evolve in a way supported by all? How can we predict early if costs, benefits and risks are distributed fairly over stakeholders in an ecosystem?
In this blog we summarize our experience with a community development projects in low-resource regions in the form of a stakeholder-driven ecosystem development method. We illustrate the method with one community development case. More detail and other cases descriptions are given in a companion white paper.
The method consists of four tasks, where the next task can be started if enough information is available from previous tasks. A previously started task may continue when the next task is started.
- Vision development (shared with all stakeholders)
- Ecosystem analysis
- Technical feasibility study
- Financial feasibility study.
We will use an example to illustrate each task.
Vision development involves a sketch of the context, the single problem to be solved in this context, one or more solution proposals and relevant assumptions made by these proposals.
For example, the project RadioMarché was done with farmers in Mali to facilitate the broadcast of offerings of local farm produce to potential buyers . Each village has a so-called aggregator who collects information about product offerings from local farmers and sends this by SMS to an NGO, Sahel Eco. Sahel Eco transforms this into a spreadsheet, prints it, and sends it to local radio stations for repeated broadcasting in local languages.
In this context, the problem to be solved is that broadcasting a text from spreadsheet is error-prone and time-consuming. The solution idea is to automate the conversion of a spreadsheet into an audio file in local languages, which is then made available to radio stations for regular transmission.
All radio stations have a telephone but some have no internet access. The technical solution must be able to deal with this.
This proposal was arrived at after extensive discussion with farmers in about 20 villages.
Once a solution proposal is available, a stakeholder analysis needs to be done and the ecosystem architecture of the proposal must be modeled. Are there goal conflicts among stakeholders? Power differences?
For example, in the RadioMarché case, stakeholders include the farmers, aggregators, Sahel Eco, radio stations and potential buyers of farm products. And there are other stakeholders, such as local providers of charching of mobile phones (there is no electricity grid in the villages), a provider of a text-to-speech system, and a mobile telco provider.
The following diagram shows the ecosystem architecture. Lower layers provide services to higher layers. Of the various stakeholders, farmers and transport providers benefit if this solution leads to more business. The benefit of the additional phone calls for the telco provider is negligible. At the same time, the telco provider is indispensable for the solution, and this gives it a position of power.
Technical feasibility analysis
To analyze technical feasibility, we need to list the use cases, lay out the IT network needed to realize these, and assess the technical risks if we implement this.
Use cases for Sahel eco are:
- Fill an excel spreadsheet with offerings
- Translate it into a written narrative.
- Transform a written narrative into an audio file spoken in local languages. This will be done with a Text-To-Speech (TTS) system.
- Make the audios available to the radio stations on an audio server (for stations with internet access) and by telephone (for stations without internet access).
- Initialize the TTS system with local languages and familiar voices.
The radio stations have one use case:
- Transmit the audio file at regular intervals. They can do it by downloading and playing the audio file or by calling the audio server and keeping the telephone close to the radio microphone when the audio plays.
The technical solution requires a system to enter information in a spreadsheet, a system to translate this into a narrative and TTS system trained on local languages (Malian French, Bambara, Bomu and Dogon) and an audio server to store the audio messages. The audio server is provided as a service by the telco provider.
Technical risks in this solution are the possible unreliability of the GSM and internet connections and the current non-availability of a TTS system for the local languages.
Financial feasibility analysis
For the financial feasibility we need to identify the value network needed for this, estimate investments and cash flows, and identify the financial risks of the project.
Our example has the following value network. Where the technical infrastructure network shows who sends messages to whom, the value network shows who has a contract with whom to create the value proposition. We give a formal e3value network in our white paper and present an informal version of it here.
Sahel Eco provides training to aggregators to send farmers’ product offerings by SMS to Sahel Eco. The aggregators need the services of local rechargers, who offer mobile phone charging services in a region without electricity, and of a mobile telco provider.
Sahel Eco uses the services of an academic institution to train a text-to-speech system to translate the product info of one village in local languages audio files. These are made available to radio stations to broadcast to audiences in the language of these audiences.
Sahel Eco plays a central role in the case and needs all other stakeholders to achieve its goal of stimulating farming in the region. But it has no power over these stakeholders. Participation of these stakeholders therefore must be motivated by the interests of these stakeholders themselves.
All arrows in the above diagram have an implicit counter-arrow, usually with a money payment for the provided service. Tracing these cash flows reveals that the distribution of interests over stakeholders is not viable in the long run.
For example, the business case for the telco provider is absent. Additional calls generated by this case were negligible, and the provision of an audio storage service for this application would generate too little income.
The business case for the TTS service is risky too, because this provider participated not for money, but out of academic interest in local African languages and could withdraw any time.
The RadioMarché project was not viable in the long run and it was succeeded by another one, called Foroba Blon, in which aggregators could call radio stations directly. This project is discussed in our white paper.
Fast ecosystem development
Our method not only leads you to solutions supported by stakeholders but it also leads you to those solutions faster than methods that ignore ecosystem business models.
Any business idea needs an ecosystem to be implemented. Valuemodeling and ecosystem simulation tools can quickly show whether the ecosystem needed for implanting a business idea is commercially viable or not. There is no need to put out immature (“minimum viable”) products in nonrepresentative markets of consumers tolerant of product failure. A faster, less risky and less expensive method is to develop the commercial ecosystem model of your product jointly with the smallest product that is attractive to your market and reorient your development when the commercial analysis tells you to do so. Your product will go live with less risk, less wasted effort and better prospects.
|||A. Bon, Intervention of Collaboration?, Amsterdam: Pangea, 2019.|