IN 4150 Digital ecosystem strategies ignition launch bootstrapping

IN 4150 Digital ecosystem strategies: ignition, launch, bootstrapping, evolution and growth, …

Network effects – self-reinforcing processes ).

Multi-sided markets • Same side & cross-side effects • Positive & negative effects • Ex: Uber

Platform ignition • Critical mass -> explosion • Mobile payment platforms in developing countries – Ignition, slow ignition, no ignition • Tactics – Zig-zag – Two-step –. .

Launch tactics 1. Follow-the-rabbit (closed applic – open platform, ex. Amazon) 2. Piggyback (Pay. Pal on e. Bay) 3. Seeding (creating value for one set of users) 4. Marquee (target “key” user first) 5. Single-side 6. Producer evangelism 7. Big-bang 8. Micromarket (Facebook)

Resources • Start-up, “no” money: ex. Facebook • Established firm, lots of money: ex. Vipps (DNB)

’Multidimensional’ critical mass • Granovetter’s pedestrians: distribution of individual preferences. • Diversity of users (resources, location, motivation, knowledge, style, …) • Diversity of services (ex. Facbook) • Which user first, second, . . • Which service first, second, . . • Arranging users and services

’Bootstrapping’ • Enclocypedia: ’She bootstrapped herself to the top’ – to manage on one’s own • Lifting yourselves by your hair • Booting a computer • Implementing a programming language • Language learning • Making a tool/network by means of the tool/network • ”Deliver a better today, rather than promise a better tomorrow”. • Late adopters adopt because the others have already • First adopters must adopt for another reason

Identifying and arranging users and services • • • Multi-dimensional Personal, individual Use areas and situations Technological aspects Coordination/governance structures Arranging preferences and dimensions (dynamically)

Bootstrapping Network Technologies • Select motivated and knowledgeable users • Simple, non-critical, non-complicated use areas where no large organisational changes are required. • Select simple, relatively cheap and well supported technical solutions. • Users first, then functionality/technology

Individual/personal preferences • Motivation, attitudes towards technology • Knowledge about technology

Aspects of use areas and situations • Resources • Benefits of communication within a small network • Critical/non-critical activities • Complexity of tasks and work practices • Organizational changes needed

Aspects of technology • “Distance” between users and designers/vendors • complexity • costs • flexibility • “allied with the future”

Coordination and governance • Structures and institutions have to be established (bootstrapped) • “Standardization bodies” – Technology (protocols) – Work practices/procedures (protocols) • (The Internet is an example to learn from in this respect as well)

Design strategy • Start with – simple, cheap, flexible solution – small network of users that may benefit significantly from improved com. with each other only – simple practices – non-critical practices – motivated users – knowledgeable users

Bootstrapping design principles 1. Design initially for usefulness 2. Draw upon existing installed base 3. Expand installed base by persuasive tactics

Boostrapping algorithm 1. Repeat as long as possible: enrol more users 2. Find and implement more innovative use, go to 1 3. Use solution in more critical cases, go to 1 4. Use solution in more complex cases, go to 1 5. Improve the solution so new tasks can be supported

Innovation • Flores et al. : – Re-combination – Cross-appropriation – Reconfiguration • Arthur: – Re-combination – Structural deepening • Lane: Exaptive bootstrapping (self-reinforcing)

Digital technology • “Exaptiveness” – Norwegian Bank – Apple (Mac -> i. Pod/i. Tunes -> i. Phone/Appstore -> Apple. Pay) – Amazon, Google, Facebook, . .

Trip advisor • Collecting data from existing databases • User ratings • Booking, payment, . .

Facebook • Messaging system for students in Zukerberg’s class at Harvard– extremely simple • Adding features (groups, likes, . . ), diffusing • Integration with – ad platforms – publishing platforms – Shopping platforms, corporate solutions, . . – Payment platform (crypto-currency? ? ) –. .

Alibaba • 1999 -2004: B 2 B platform for SMEs – Websites for customers – Ali. Pay – Trustpass – Wangwang (IMS for haggling) – Taobao (C 2 C platform) • 2005: Yahoo China, “closing” Alibaba • 2006: Koubei. com (Lifestyle portal) • 2007: Alisoft, Aliloan, Alimama, …

Easypaisa Telenor Pakistan (2017: 41 M subscribers) 30 sales offices, 278 franchises, 300 K agents Illiteracy (30 -40%), 85% ( of 197 M) unbanked Government & World Bank: Financial inclusion, “banking the unbanked” • Brachless banking regualtion • • – Bank led model – 4 levels of KYC requirements • 2015: re-verification of SIM cards

Launch • 2008: 51% of Tameer Microfinance Bank (the rest in 2016, Telenor Microfinance Bank) • Oct 2009: Over-the-Counter (OTC) service – Agents (2. 500) and franchises, utilities – All citizens – Utility bill payment, money transfer – End 2012: 8. 000 agents, 100 M transactions – 2016: 75. 000 agents in > 800 cities

OTC • • • Low threshold for users For all citizens Attractive for agents KYC requirements set limitations Expensive – Manual operations by agents – Cash management

M-wallet (account) • Launched 2010: bill payment and money transfer • No transaction fee (until 2016) • 25% discount on certain products • 2011: 1. 200 agents could sign up users • “no” growth until 2015

New services • Bulk disbursement: BISP (15% of population), salary, pension, . . • International remittances • Credit and savings • Air-time top-up • On-line shopping • Payment service (QR codes) • Insurance • B 2 B solution

Technology • • Mobile payment solution Integration with mobil telecom tech Integration with banking systems Developing apps – – – – Agents individuals Corporate portal m. Wallet POS terminals Merchants. .

Relations between users and services • • • Many sides. . Agents (and franchises) Individuals Shops Corporations and governance agencies International remittances organizations

Variations within groups • • • Wealth, size Location Knowledge Age Long-term – short-term priorities

Launch • OTC: low threshold, • Bringing onboard big organizations: BISP, utility providers

Issues: OTC - m. Wallet • OTC – low threshold, all citizens – Attractive for agents • m. Wallet – Low added value for most users, illiteracy – Threatening agents’ business – partly depended on agents for opening account – Re-verification of SIM cards!

Managing dependencies • Introducing more corporate organizations (BD) • New services • Shopping – University districts – --- • Slowly making m. Wallet more attractive for all • FINE GRAINED, CONTEXT SPECIFIC STRATEGY • Cultivating financial literacy