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Where Traditional business model is related to planning and planting a flower, designing an ecosystem is far like growing a whole forest: more complicated, with extra players to interact & unexpected coming results. Certain challenges also exist resembling that of a consumption–outcome problem or like chicken–egg problem.

However, business ecosystems, analogous to construction of forest, can’t be entirely planned and designed—they also come up. For ecosystem designing the following steps should be kept in mind which are interconnected:

1 Knowing about the problem to be solved.

2 What are the components of the ecosystem?

3 Know about the starting governance model of ecosystem?

4 How to grab the cost of ecosystem?

5 Can you determine the consumption–outcome problem at the time of beginning?

6 Assuring the reliability of ecosystem?

Step 1: Knowing about the problem to be solved?

Initially, problem should be defined clearly which the ecosystem is going to solve so that it can convince the high business investors and right actors for participation. If someone has ever thought 20 years ago that businesses like YouTube and Instagram could be built on taking selfies, then posting photos of your meals, and animals clips.

 Is ecosystem the best choice?Ecosystem–blockchain business includes everything that a physical ecosystem (servers, clients, h/w, s/w) contains. The following are key points in what scenario ecosystem might be preferred:➢ Need for decentralization, transparency and immutability of records.➢ When Gateways are more expensive and time consuming like Expedia or Airnb.➢ Need for more security among users and developers.➢ When the speed of the new data is increasing anonymously as well as previous record is also mandatory to be stored.

What type of ecosystem you required?

Since all business ecosystem functionalities are not same, some business ecosystems work on the project completion—as small level players in the market and then handing over the project to the higher players. Some work on the transaction ecosystem by linking the providers and the requestors. Some work on the solution ecosystem which combines all the elements of the solution of the problem. As a startup business in this technology, one needs to know about the type of ecosystem, as they all differ in their construction, purpose, monetary mechanism and most importantly, success factors.

Step 2: What are the components of ecosystem?

Different participants get roles on the basis of the value prototype. A solution ecosystem can be understood by the examples of chorus having many mentors, suppliers and middleman.

In transaction ecosystems, the band director guide’s (who teaches chorus) role is played by the owner of the business ecosystem whose role is to tie a bond between manufacturers, suppliers and customers. The director guide constructs the ecosystem, inspires to join the system, describes about regulations, standards and rules. The success of the ecosystem depends on the responsibility completed by the assigned role. Also equating investment needed for the longevity of ecosystem is sustained. The failure of the ecosystem or we can say dissociation of the system is because of the Band director guide not being able to fulfill the duty assigned to him.

Step 3: Know about the starting governance/authority model of ecosystem? Determining Degree of Openness

Authority required balancing two requirements for the business ecosystem to get success: amount creating & sharing.

Main governance query for business ecosystem which is emerging-what is the degree of its openness. Queries in 3 areas having solution:

 Admittance: In the business ecosystem that are going to be as partners? In order to get entry to the ecosystem and its resources what conditions do they have to fulfill?

 Partners: To structure the business ecosystem at what extent are participants invited? What are the capacity, fine points, and severity of the rules allowing this? Who’s going to decide the distribution of the value among the various participants?

 Assurance: Are the participants permitted to opt for multi-mode in competing with other businesses? In few sectors, they battle for their own degree of openness. If we have a look Android broke the superiority of Apple iOS by providing connectivity of openness, Facebook conquers the fragility of MySpace’s open model by providing the icon of accepting request or deleting i.e. providing property in friend’s feature. From the monetary point of view open ecosystem grows faster as compared to the others at the time of execution. It also encourages decentralization and allows variety of developers and partners.

However, to authorize the open ecosystem is not easy though, therefore it iswell adapted for goods and services with finite drawback and less cost of deterioration. Growth v/s quality, decentralized v/s interconnectedness, and speed v/s flexibility are various individual factors on which the exact degree of openness for business ecosystem will rely on.

Step 4: How to grab the cost of ecosystem?

For what charges are applicable?

The main question of the ecosystem “chorus” is the value i.e. money should be distributed equally among the participants and keep share of profit for its own. Also, the amount should be enough to be assigned among the participants. Apple takes itself 30% from the app that it sold from its application store. Similarly the businesses create ecosystem that can be sold as a service to higher businesses in order to capture value.

Step 5: Can you determine the consumption-outcome problem at the time of beginning?

What conditions led to its failure?

The failure of the ecosystem at the time of execution is because the authority was not able to calculate the size of the participants—how many buyers will be there? How many sellers will be there? Due to this, they are not able to protect the network which results in crash of the ecosystem. Sometimes they overestimate the profit and is negligent towards the importance of network effects. This race is not coming at first position but first with complete solution. For example, Apple iPod was not first in the digital market but it was first with a combination of software iTunes with hardware. Another very important factor is to get to know about the number of transactions by the number of participants. Being aware of network density is an important driver of amount for the actors.

Lastly, the selection of participant is important. It doesn’t matter how many participants are there but their quality matters. For example in Uber, there are equal numbers of riders and drivers so it is a balanced one.

Step 6: How can you assure the reliability of ecosystem?

Is scaling can be possible?

Yahoo search engine initially started as a hierarchical database edited by employees and WebPages are classified based on tree structure. Yahoo gained popularity for a very small time with the advent growth in internet—at that time it was not scalable and ultimately taken over by Google with the scaling page rank algorithm. So, if you desire to have long term viability of the ecosystem, it is important to get best knowledge of the scalability position, design and strategy of the developing business ecosystem. Among the three, scalability is the main step for the availability.

How expansion of the ecosystem takes place?

Expansion. Let’s have a look on some examples—Instant change in technologies and customers preferences Microsoft still manages to defend Windows as an operating system over the three decades. Uber initially started its ride services but extended to the food delivery and bike riders services. When LinkedIn started, its aim was to establish a link with the professionals but at present it serves as an online recruiting and publishing contents. Therefore, for the expansion of ecosystem, it should be having two features: stability and flexibility so that new functionalities can be added to the system accordingly. In reference to this, we can say expansion of ecosystem takes places by:

1 New products can be added in to an existing system.

2 Expanding the services in the same market (Uber).

3 Creating advantage after the success of one ecosystem (Apple iPods).

How can you protect against adverse reaction?

Large business ecosystem has experienced adverse reaction from the customers and managers. On the top of list is Amazon who was recently criticized for not collecting sales tax in order to come first in the race of competitors similarly with eBay. Also, Uber was blamed for security, violation of the rules of transportation, insurance and rights of the drivers and worker’s rights that are applicable to taxis. Last on the list is Facebook which was criticized for not securing the data of the users. Hence, the ecosystem should be designed in such a manner that it should not only verified legally but also socially for its longevity. Business ecosystem can only thrive in future if it tries to persistently adhere to concrete value for their consumers and disseminate equal value to all its contributors.

To design an ecosystem is a main attempt so the above-mentioned six interconnected steps are helpful in designing a business ecosystem. Any entrepreneur or start up can be structured if the design is followed wisely or it can bring transition in the existing organization. It is also important to understand that any business ecosystem cannot be completely designed as well as planned like in the case of a forest they also emerge.

Those ecosystems that want to gain profit in the future will have to be flexible, ready for the up gradation in technologies—both hardware/software, unwanted happenstance and also working according to customer preferences.