I was bringing a new version of my set top box chip-set to market … and we had major competition.

To my customers – Cable and Satellite TV providers – a choice of vendor was a brilliant thing.

But to a business manager and sales team selling them the chips used inside set top boxes …

… Competition meant …. longer sales cycles, greater customer retention effort

… and, even worse, pricing pressure.

In the hardware chip business, we risked millions of dollars in upfront product development and testing costs before we saw a single dollar in revenue

…. and the last thing that we wanted was to see margins cut or a major customer go elsewhere.

I wanted to STOP my CUSTOMERS from viewing my product as a COMMODITY

It came down to one question.



You see, the new generation of set top boxes that customers were delivering using my chip-set did a couple of things

… that directly impacted my customers’ bottom line and made them more able to compete.

First, the next generation set top boxes were going to lower overall bill of materials cost for my customers.

This mattered because they were giving the boxes away with each new cable or satellite subscription.

Lower cost set top box meant lower customer acquisition cost period… and a faster time to break even.

Secondly, the next generation set top boxes had better functionality and were faster.  So delivered more sizzle to potential customers!

That was it!

I needed to do everything that I could to get my customers’ next generation set top boxes, that included my chips in them, on the shelves

…. as quickly as possible.

I could have just been a chip vendor – But that would have meant I sweating it out against my competition, competing on features alone … as an underdog 

… Assuring me a race to the bottom on price.

Instead I offered customers buying my hardware a software development platform.

And some application software, SDK, APIs and debug tools …. so that they could easily develop and test their own software.

A set of hardware boards and debug tools that they could put to work RIGHT AWAY to develop their own system software for their product.

In parallel (instead of after) developing their own hardware boards that included my chip-set.

The result?  – They could now develop and port software  before their own hardware board was ready

… So their product got to market months sooner.

I was now offering my customers an ECOSYSTEM, not just a chip-set product. 

A win for my customer… because I served them at a higher level and got them to market months sooner.

A win for me … because customers chose me for their next project … and purchased chips in volume sooner.

… And what if you’re a SOFTWARE vendor, not a hardware provider ?

?? How can a software vendor cut pricing pressure with an ecosystem

?? How can you make existing customers keep renewing … and use your stuff even more  

ANSWER:  MAKE YOUR CUSTOMERS MORE COMPETITIVE for the project that they are desperately looking to complete.   

For example, deliver a more complete methodology, wizards, integrations with 3rd party applications via clearly defined software interfaces. Mobile Apps for convenient access from anywhere.

Train consulting services partners, and deliver “How To” content online for free. 

Not sure where to start? ….

…. Yet you know that you need to get rid of price pressure?

Read on !

Because here are the steps. 

At the end, you will also find a FREE worksheet that you can download to create your own blueprint.


Mapping Out Your Ecosystem

You need to figure out how you can make your customer more successful and never want to leave.


Ponder these 2 important steps 

STEP 1: ?? Ask… When customers start to use my product, what else do they need … next? 

In other words, how can I create an ecosystem that STACKS VALUE on top of my product … for the direct benefit of my customers?

For example, at one semiconductor Company, I could charge premium for chip manufacturing.

I could do this because we had developed a methodology that customers simply had to follow to design, optimize and test their chips and know with almost certainty that things would work (insofar as they had specified the correct thing).

The methodology comprised a workflow of integrated 3rd party design tools, that we had documented and tested.

Our customers won

… because they no longer had to worry about design tool integration issues when designing chips. 

We had given them a cookbook of how to use the design tools. They could create fast, low form factor chips quickly.

The next Step to ponder, when planning an ecosystem is….

STEP 2: ?? Ask … What am I doing, outside of product features themselves … to increase Customer Lifetime Value and, gulp,  Stop Churn?

This comes down to developing an ecosystems that will do 4 things

(a) Engage customers … to earn loyalty

(b) Supply massive convenience

(c) Get them up and running with your product rapidly.  

(d) VEST the customer in using your product – their knowledge base and database, if you like.  They create something valuable that they can exclusively re-use in your product, for example. For example, software that runs on top of yours, intellectual property code or macros that have been validated to work with your hardware.

    … You introduced a “switching cost”

Now that we’ve explored the 2 steps …. let’s convert each into an ECOSYSTEM that adds value to the customer.


Ecosystem Step1: “Meet Customer’s Next Need” 

 We asked ourselves “When my customer starts to use my product, what do they need to do next?”

Find examples that relate to your product that your product does not address 100% for your customers.

Here are some examples

  • Integrate with other software tools and apps.
  • Testing the customer’s end product
  • Put a methodology in place
  • Analyze outputs from my tool directly or on a system board
  • Performance-tune

Then ask yourself, how might an ecosystem that revolves around your product solve this?

?? How can you give the customer more value with your ecosystem?

Check out the list below for suggestions.

WARNING: This is quite a list !

…. So pick just the ones  that are directly relevant to your business.

Meet Next Need” Ecosystem List

To Stack The Value

Turnkey Solutions

  • Applications and system software that integrate with your software that solves a specific problem or provides specific infrastructure
  • Mobile Apps that let customers access your software more conveniently
  • Proven methodologies to get a specific job done for the customer

Customization Solutions 

  • SDKs and Open Proprietary APIs (that you own and that are open ).  You deliver Interfaces and environments for customer to integrate their own custom code or build software on top of yours
  • Software Development Platform suppliers for your chips

Done For You Services

  • Consulting Services — “Done for you” customer development projects.
  • System Integrators and Value Added Resellers (VAR) to create custom software for your hardware
  • Data integration solutions for servers, networking, computer processing and storage

Hit The Ground Running

  • Training: Experts that can train your customers
  • Certifications: Experts that help you and your customers  meet stringent consumer electronics or medical, automotive and military and aerospace safety requirements

The idea is for you to pick from this  a short list.

… of things that stack the most value to customers on top of what you sell them.

… and that differentiate your solution

TIP: If you are struggling to come up with a short list, I want you to ask your customers the following …

“When you start to use products like mine, what is your…

  • Biggest time sink e.g. porting or developing own system software
  • Biggest schedule risk e.g. learning your tools
  • Biggest performance issue e.g. rendering images in your tool
  • Biggest quality risk – e.g. Difficulty in verifying the output from your software or hardware
  • Biggest scaling risk – e.g. Getting data in and out for Testing takes too long
  • Biggest profitability risk – e.g. Getting to market before competition”

CONGRATS – YOU NOW HAVE AN ECOSYSTEM short list that stacks more value onto your product.

Now, there is one more step that you need to take

… that relates to growing existing accounts ….  Grow Customer Lifetime Value


Ecosystem Step2: “Grow Customer Lifetime Value” 

We are now going to add an ecosystem designed to grow existing accounts and cut churn.

You are going to pick ecosystem items that result in making your product sticky and that drive up customer usage.

Let’s start with product stickiness, otherwise known as “switching cost”. 


?? How can you make it downright unlikely and even painful for a customer to ever want to switch to your competitor?

I am not suggesting that you trap a customer into having to keep using your product.

I am talking about ways to grow convenience and the customer’s INVESTMENT in your product.  So that there is some barrier or significant loss if they switch to a competitor.

Here are some categories to pick from…

Make My Product Sticky” Ecosystem List

To Increase Switching Cost

Customer Vesting#33333

  • APIs that lets customers run their own software on top of yours. Open proprietary interfaces are particularly powerful.
  • Batch interface that lets customers run repetitive tasks or sequences efficiently using scripts.
  • Proven Methodologies to get a task done, that you document or automate
  • Software development platforms that get system customer develop software in parallel with developing their hardware, so as to get products to market faster
  • Save building blocks and macros for future re-use
  • Shareable code libraries and proven intellectual property (IP) or building blocks.  Things that save the customers from having to re-invent the wheel, and that are low risk since they are already known to work


  • Wizards that give customers productivity and enforce their own methods or processes
  • Reporting and Analytics that give useful feedback, help customers tune results and track trends


Let’s move on and figure out how to use an ECOSYSTEM to grow existing accounts organically and cut churn.


?? How do you gain more usage and adoption within an existing account … to increase customer lifetime value (CLV) ?

Selling to an existing customer is, of course, much cheaper than acquiring a new one – So you want to make it easy for customers to get started and then share the love with colleagues. 

Here are some suggestions…

“Gain More Usage”

Ecosystem List


  • Online communities such as Facebook and LinkedIn Groups, where users can help their peers.
  • Share-ability: Team members and communities to can save and share results, input files, macros, libraries or templates
  • Regular FREE Online training to keep customers engaged … and discover new opportunities based on questions that they pose
  • “How to” content marketing: Training videos that solve the biggest problems for each niche that you serve

Hit The Ground Running

  • Migration tools – That move customers from a competitor into to your product with ease
  • On-boarding: Done with you training that gets new users over the first hurdle… and a first success.  Create training with incentives to complete the first couple of steps. Architect it to result in a quick and early success.  Keep it simple to avoid overwhelm at all costs
  • Templates, code libraries… and editable examples that give new customers a head start and hit the ground running

OK – You now have a short list of ideas for your ecosystem.  Let’s use the list to put together a blueprint.

⏬  Let’s put it into action below  ⏬


Your Ecosystem BluePrint

CONGRATS… You now have a short list of things to do to start building your ecosystem.

… To grow customer lifetime value

… And avoid the race to the bottom on price

.. To making your customers more competitive.

Here’s your complete action plan

  1.  Recap: Create ecosystem short list  “WHAT THEY NEED NEXT”   Things that stack value on top of your product. Follow Step 1 above.

2. Recap: Create ecosystem short list “INCREASE CUSTOMER LIFETIME VALUE”.  Things that make your product “STICKY and “DRIVE UP USAGE” . Follow Step 2 above.

You now have an ecosystem short-list.

3. Should you do In-HOUSE development… or a PARTNERSHIP ?…  for each ecosystem short list item?

Divide Your short list into… 2 categories

“Need Partner Program”

or “Develop in-house solution”

The beauty of this is that you can drive up value that you provide and grow switching cost often with a few small add-ons and a strategic partnership.

Leverage partnerships …  to stack value … while you focus on your core competency.

But whom should you partner with?

Find out who else’s tools or hardware your customers and niche use – and why.

Find out who specializes in training and supporting people in your niche.  Contact them first.

4. Market and Sell the ECOSYSTEM, not your product.  

Educate prospects on how your ECOSYSTEM SOLVES A BIG PROBLEM for each specific niche that you serve.

Create webinars, training video playlists, online communities, podcasts, and joint events where you co-market with partners

Places where you can use your ecosystem solution content to help people.


Leverage partners as sales channels. 

Invite partners to an online Summit or Podcast that you host and ask them to invite their mailing list and customers.

Invite partners to live events and ask them to promote the event to their customers.   

This is how you can build relationships with their customers and grow your list of prospects from your partner’s list.

TIP: Your content and events should  drive people into your ONLINE SALES FUNNEL. 

An online funnel is a sequence of web pages that educates, entertains and inspires visitors

… Teach them something new in a video sequence or members area – and drive them toward more sales.

An online funnel is where you encourage visitors within companies that use your products to enter their contact info, and where they learn to know, like and trust you


  1. You make your customers more competitive

… so that you avoid the race to the bottom on price

2. You increase customer lifetime value

You do this by growing use in existing accounts

…. and by  increasing switching cost

so that existing customers buy more and renew.

3. You sell by serving, without being salesy.

What are your questions and  thoughts about using ecosystems to build business?   




How to enable your customers to be more competitive…. grow customer lifetime value, and avoid the race to the bottom on price


Add ons, methodologies, integrations, services for differentiated value


Onboarding, communities, frequent training and share-ability


Add in-house ecosystem components and partnership programs


Sell ecosystem, not product. Target partner customers. Sell more.




Business Consulting