Start-Ups Should Understand Their Ecosystem
Jitesh Nair

The term ‘ecosystem’ was introduced in the field of business strategy by James F. Moore. He suggested that firms be viewed not as members of a single industry but rather as members of a business ecosystem comprising of firms from a variety of industries. An ecosystem framework incorporates the broader environment within which organizations operate and takes a macro view of the external factors that contribute to the focal firm’s value creation.

Over the last decade we have witnessed the rapid blurring of established boundaries in industry, departments and markets that has led to traditional well-entrenched concepts such as STP (segmentation, targeting and positioning), economic view of the firm and capital investment decisions to maximize value being questioned for their lack of robustness in changing scenarios.

Management researchers and practitioners have developed alternative business models and strategies for growth and profitability of firms. The ‘ecosystem’ approach is particularly useful for guiding a start-up firm’s strategic choice (in Fintech, Agritech, AI and IoT) since most of them operate across the traditional industries.

These new age sectors seek a co-creative and collaborative approach from the ecosystem members. Start-up entrepreneurs need to decide on which of the available ecosystems they seek entry into and the relative position of entry. They also need to be aware of the growth stage and health of their ecosystem, including the current players and the environmental conditions that do or potentially could influence their ability to establish, sustain and grow. This also means that entrepreneurship educators need to train the new age entrepreneurs on new management skills, help create a different work culture, facilitate a new approach to information processing and dissemination, and facilitate new forms of leadership.

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