SEPTEMBER 20199Imagine this: You bought an `Am-azon-exclusive' TCL television that has a Netflix button, royally placed at the center of its remote. You are watching your favorite Pixar mov-ie, which is being streamed only on Netflix (for now), and you suddenly start feeling hunger pangs. You turn to Alexa and ask her to get you a pizza, which she orders via Zomato, her exclusive food partner. But you changed your mind, and now you want to step out for a bhelpuri in-stead. Just ask Alexa to Book an Ola, her exclusive ride partner!Do you see what is going on there? Big brands are trying to cre-ate a moat around their custom-ers' experiences so that they never leave their ecosystem. To be fair to these brands, this seems to be working just fine for now. After all, who will not want to keep their cus-tomers engaged and prevent them from falling into the hands of the other camps. But from the custom-ers' perspective, this could mean that they are getting exposed to lesser service providers compared to a world without these ecosys-tems. Customers are getting lesser options to choose from, and in fu-ture, if such ecosystems become in-evitable they could start command crazy premiums or invent their own privacy rules. What is currently be-ing promoted at the pretext of cus-tomer comfort could turn on itself and start biting them back because customers would have nowhere else to go.One may argue that these are just some blue-eyed projects and not the core offering of these com-panies. After all, connected devices are supposed to do just that ­ con-nect you with others! But the issue is, if the connectors happen to be so big and powerful that the fate of end companies depends solely on being part of their ecosystem or not, I think that is a dangerous proposition. Worse still, if two big companies join hands, then the third stakeholder (customer) stands to lose. It's the balance of power we need to watch out for.But it is not a bleak story. We have seen how PayTM became a fairly big brand just by piggy back-ing the launch of Uber in India. We have also listened to the arguments on both sides of Facebook spon-soring free internet for the yet-to-be-digitalized countries. As busi-nesses/governments/customers is there a clear-cut solution? I think like for most of the things in life, the answer is ­ It Depends!However, one thing is certainly becoming clear. The answer to ef-fective growth is not just Econo-mies of Scale anymore, but Econo-mies of Ecosystem.We are entering a phase where brands will jostle for space for be-ing tagged with other brands. They will also probably go to extremes to show their loyalty towards these 3A connectors in order to feel more se-cure. This has a scary resemblance with the cold war era if you happen to have a crazy imagination like me. Where Google is the Uncle Sam and Amazon is Russia, both hurrying in the arms race. However, all my An-droid friends will agree that in this fictional `corporate world'Apple will play China (did you say firewalls, censorship, and more walls). But this fictional build-up is based on true events ­ try buying a Chromecast/Apple TV on Amazon, or streaming Prime Video on a Chromecast, or YouTubing on a Firestick, and you will know!Only time will tell who will come out as the winner in this cold war, which is brewing at both Silicon Valley and Wall Street at the same time. Which side are you on? The answer to effective growth is not just Economies of Scale anymore, but Economies of EcosystemDeepak Gandotra
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