There is a useful distinction that arises from examining our position in relation to the customer-vendor loop: product and ecosystem. These are not two different kinds of loops, but rather a matter of our involvement in them. For example, the same loop can be the product loop for one organization and the ecosystem loop for another. Think of them as different perspectives on a customer-vendor loop.
We’ll start with the product loop, since it’s the perspective we’ve been using so far in this string of stories. Should you and I start an ice cream shop, we’d be establishing the product loop. We are the Vendors, our Product is ice cream, and we attract Customers to buy a scoop or two (Interaction). In a product loop, the Interaction is commonly a purchase of some sort.
Now, let’s pretend that you and I, having grown tired of churning and scooping ice cream all day, developed a popular social media app. In this app, Vendors are the app users who produce content (product), Customers are the users reading and reacting to content (interaction). Both sides attract each other, generating a compounding loop. For a budding influencer, the app looks just like a typical product loop: they produce content, attract users, etc. However, from yours and mine perspective, this loop reflects an ecosystem of users. We built a place that attracts both Customers and Vendors — and lo and behold, they came and started living in it. Our product enables a whole other customer-vendor loop, or more precisely, an ecosystem loop. A reliable way to spot an ecosystem loop perspective is when our product is the setting for another customer-vendor loop. This setting is commonly called a “platform”.
Ecosystems are weird – they are somewhat of a living thing, having a “mind” of their own. Working with ecosystems can feel a bit discomforting, because we have no direct control over them. Inviting an ecosystem inside of our app is kind of like planting a random seed in our home garden. It might blossom into a beautiful flower or it could take over the whole garden, kudzu-style – or both! The word “platform” and its sense of supportive stability might just be our way of coping with the unknowable.
Let’s also pretend we’re very lucky and that the compounding strength of this ecosystem loop is pretty high, and we can afford to attenuate it by imposing some sort of a content production fee on our influencers. In reality, this is a seriously dubious business model, but in this story, you and I live in the alternate universe where it worked. It worked! We now have revenue continuously flowing and growing with the loop. So lucky.
Of course, we can also see the product loop perspective: after all, we ship a product. Through this perspective, we are the Vendor, our Product is the app, and our Customers are folks who download and use our app. What is Interaction that attracts us to build the app in the first place and then to support and improve it? Unlike in our previous endeavor with the ice cream shop, it is no longer the purchase of the Product (the app). The fountain of revenue from the ecosystem loop will encourage us to remove any attenuation from our app product loop, including imposing a price to engage with the app on our users. We will want to make the app free and as easy to use as possible. In this particular product loop, the attraction comes from the potential (and realized) value of the ecosystem loop. For you and I, the valuable Interaction is simply users engaging with our app. This “Interaction value = user engagement” pattern is a strong marker of an ecosystem loop lurking underneath, even if aspirational.
But wait, there’s more! Our app product loop is not just sitting out there all by itself. When we decide on the technology we’ll use to build our app, we pick… the ecosystem loop in which we’ll participate! Should we choose to make ours an iPhone app, we will be joining the ecosystem of iPhone app developers and users. Should we opt for a PWA, we partake in the Web ecosystem. Or maybe we’ll choose to do both. Every product loop is a part of at least one ecosystem loop, it seems. And every ecosystem loop is a part of some product loop. It’s a network of loops, laddering up all the way to the whole of humanity … and beyond.
Understanding this product/ecosystem interconnectedness seems fundamental to cultivating a viable business. Having a sense of where our product loop is placed in relation to ecosystem loops and how it benefits from them helps develop a sustainable perspective that helps us see these loops, examine their asymptotes and thus, allow us to better understand how these asymptotes will influence ours. Similarly, spotting an ecosystem loop inside of our products might help us realize that the value of our product loop is now buoyed by something we no longer have direct control over. And conversely, having even a rough sketch of these loops would help us avoid counting on the miracle of constructing an ecosystem loop from whole cloth.