BCG Henderson Institute

Ecosystems are increasingly popular, fueled by the success of iconic examples such as Google, Apple, Facebook, and Amazon. Yet confusion about them abounds, and many commonly held beliefs about ecosystems simply aren’t true. To objectively analyze several key details about ecosystems — such as how often they succeed, how important it is to be first, and how long they take to pay off — we conducted a quantitative study of ecosystems over the past four decades. The results show that ecosystems tend to follow one of four paths during their life cycle. Moreover, there are three critical windows during which actions by management can have a disproportionate effect on long-term success.

Ecosystems are tough to analyze due to, among other reasons, a lack of structured data. With so little quantitative analysis, it can be tempting to look at the most conspicuous current examples and believe that ecosystems are wildly successful — but that would be overlooking the much larger number of entrants that failed to take hold. We analyzed the performance of 57 ecosystems in 11 sectors across geographic markets and found that fewer than 15% of the ecosystems studied were sustainable in the long run.

  • Martin Reeves

    Chairman, BCG Henderson Institute

  • Hen Lotan

    Alum Ambassador (2018-2019), Strategy Lab

  • Julien Legrand

    Alum Ambassador (2018-2019), Strategy Lab

  • Michael G. Jacobides

    Sir Donald Gordon Professor of Entrepreneurship and Innovation; Professor of Strategy and Entrepreneurship at London Business School

Sources & Notes