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Harvesting

Scaling innovation by observing a platform's ecosystem, identifying successful third-party offerings, and then acquiring, replicating, or integrating them.

"Allowing others to develop upon your offerings and harvesting those that are successful. Techniques for ensuring harvesting creates positive signals rather than creating an environment others avoid."

  • Simon Wardley

🤔 Explanation​

What is Harvesting?​

Harvesting is a platform strategy where a company creates an ecosystem that encourages third parties to build new products and services on top of its core offering. The platform owner then acts as a "sensing engine," monitoring the ecosystem to see which of these third-party innovations gain the most traction with customers. Once a winner emerges, the platform owner can choose to "harvest" it by acquiring the company, replicating the functionality, or tightly integrating it into the core platform. This allows the platform owner to benefit from a wide range of experimentation without bearing all the costs and risks.

Why use Harvesting?​

This strategy offers several powerful advantages:

  • Outsourced R&D: It effectively outsources the risky and expensive process of early-stage innovation to a broad ecosystem of developers.
  • Market Validation: The success of a third-party offering provides clear market validation, demonstrating that there is real customer demand for a new feature or service.
  • Reduced Risk: By waiting for a clear winner to emerge, the platform owner significantly reduces the risk of investing in ideas that won't gain traction.
  • Increased Agility: It allows a large company to innovate and respond to market needs much faster than if it relied solely on its internal development processes.

🗺️ Real-World Examples​

Apple's App Store​

Apple provides the iOS platform and the App Store, but it doesn't create most of the apps. It observes which apps and features become popular. Over the years, Apple has integrated functionality that was once the domain of third-party apps directly into iOS. For example, features like flashlight apps, screen recording, and keyboard enhancements were all pioneered by third-party developers before being harvested by Apple and built into the operating system.

Amazon Web Services (AWS)​

AWS constantly monitors how its customers are using its primitive services (like EC2 for compute and S3 for storage). When they see common usage patterns or customers building the same type of solution on top of their primitives, they often release a new, higher-level service that productizes that pattern. This makes the solution easier to use and captures more value for AWS. Many of their managed services were born from observing and harvesting customer innovation.

Microsoft and the Windows Ecosystem​

For decades, Microsoft has observed the vast ecosystem of software built for Windows. When a particular category of utility or application becomes indispensable for a large number of users, Microsoft has often chosen to build a similar feature directly into Windows. This has happened with disk compression, file search, and many other utilities.

🚦 When to Use / When to Avoid​

🚦 Harvesting Strategy Self-Assessment Tool

Find out the strategic fit and organisational readiness by marking each statement as Yes/Maybe/No based on your context. Strategy Assessment Guide.

Landscape and Climate

How well does the strategy fit your context?

  • Your map shows a platform with a growing ecosystem of third-party developers and solutions.
  • There is a high rate of experimentation and innovation happening within your ecosystem.
  • You can identify clear patterns of customer demand based on the success of third-party offerings.
  • The components being built by the ecosystem are adjacent to your core platform and could be logically integrated.

Organisational Readiness (Doctrine)

How capable is your organisation to execute the strategy?

  • We have a robust platform or ecosystem that is attractive to third-party developers.
  • We have effective "sensing engines" (e.g., analytics, community engagement) to monitor the ecosystem.
  • We have the technical capability to replicate or integrate new features into our platform.
  • Our leadership understands the delicate balance required to harvest without poisoning the ecosystem.

Assessment and Recommendation

Strategic Fit: Weak. Ability to Execute: Weak.

RECOMMENDATION
Consider alternative strategies or address significant gaps before proceeding.

LowHighStrategic FitHighLowAbility to Execute

Use when​

  • You own a platform with a vibrant and active ecosystem.
  • You want to accelerate your pace of innovation without taking on all the risk.
  • The market is moving quickly, and it's difficult to predict which new features will be successful.

Avoid when​

  • You do not have a platform or your ecosystem is weak and underdeveloped.
  • You are likely to be seen as a predator, which would destroy the trust of your developer community.
  • You lack the resources or agility to act on the signals you are observing.
  • The legal or technical barriers to acquiring or replicating the innovation are too high.

🎯 Leadership​

Core challenge​

The most significant leadership challenge is managing the relationship with the ecosystem. If developers feel that their best ideas will simply be stolen, they will stop innovating on your platform. Leaders must find a way to harvest successfully while still ensuring the ecosystem remains a vibrant and attractive place for third parties to build. This requires a delicate touch and a long-term perspective.

Key leadership skills required​

  • Ecosystem Management: The ability to nurture and grow a healthy community of third-party developers.
  • Strategic Sensing: The skill to identify the most promising innovations within a noisy ecosystem.
  • Diplomacy: The ability to manage the fallout from a harvesting decision and maintain trust with the community.
  • Platform Vision: A clear understanding of what should be part of the core platform and what should be left to the ecosystem.

Ethical considerations​

Harvesting is ethically complex. On one hand, you are providing the platform that makes the innovation possible. On the other hand, you are profiting from the work of others, and potentially putting them out of business. Key questions include:

  • Are we being transparent with our developer community about our intentions?
  • Are we offering fair compensation when we acquire a company?
  • Are we leaving enough room for a healthy ecosystem to thrive after we have harvested an idea?

📋 How to Execute​

  1. Build and Nurture the Platform: Create a robust and open platform that makes it easy for third parties to build on.
  2. Establish Sensing Engines: Implement mechanisms to monitor the ecosystem. This could include tracking API usage, analyzing app store data, running developer competitions, or actively engaging with the community.
  3. Identify Successful Innovations: Look for signals of traction: high user adoption, strong developer interest, or significant revenue generation.
  4. Choose Your Harvesting Method: Decide whether to acquire the company, replicate the feature internally, or create a formal partnership.
  5. Execute the Harvest: If acquiring, conduct due diligence and negotiate a fair price. If replicating, ensure you can build a superior or more integrated version of the feature.
  6. Manage the Ecosystem Response: Communicate your decision clearly and transparently to the developer community. Emphasize the benefits to the overall platform and its users.

📈 Measuring Success​

  • Ecosystem Health: Is the number of developers and applications on your platform still growing after a harvest?
  • Pace of Innovation: Are you able to bring new, market-validated features to your users more quickly?
  • Platform Value: Has the harvested feature increased the overall value and stickiness of your platform?
  • Acquisition ROI: If you acquired a company, is it delivering a positive return on investment?

⚠️ Common Pitfalls and Warning Signs​

Poisoning the Well​

If you are too aggressive or unfair in your harvesting, you will destroy the trust of your developer community, and they will abandon your platform.

Sherlocking​

The term "Sherlocking" (named after an Apple search utility that replaced a popular third-party app called Watson) refers to making a third-party app obsolete by building its features into the OS. This can create significant negative sentiment in the developer community.

Missing the Signal​

You may fail to recognize a significant innovation in your ecosystem until it is too late, and it has grown into a powerful competitor.

Poor Integration​

Even if you successfully acquire or replicate a feature, a poor integration can fail to deliver the expected value to users.

🧠 Strategic Insights​

The Platform as a Sensing Engine​

This strategy reframes the purpose of a platform. It is not just a foundation for your own products, but a powerful sensing engine for detecting and capitalizing on market trends. The more open your platform, the more signals you can receive.

The Symbiotic Relationship​

At its best, harvesting is a symbiotic relationship. The ecosystem provides innovation and market validation, while the platform provides scale and distribution. The challenge is to maintain this balance and not allow it to become parasitic.

❓ Key Questions to Ask​

  • Ecosystem Trust: How can we harvest this innovation without damaging the trust of our developer community?
  • Build vs. Buy: Does it make more sense to acquire this company or to replicate their functionality ourselves?
  • Strategic Importance: Is this feature so important that it needs to be part of our core platform?
  • Fair Compensation: If we acquire, what is a fair price that recognizes the value the third party has created?
  • Long-Term Impact: What will be the long-term impact of this decision on the health and vibrancy of our ecosystem?

🔀 Related Strategies​

  • Innovate-Leverage-Commoditize (ILC): The underlying engine that drives a Harvesting strategy.

  • Open Approaches: Creating an open platform is a prerequisite for a healthy ecosystem that can be harvested.

  • Co-creation: Working with partners to build new services can be an early signal of what to harvest later.

  • Co-opting: A related strategy where you might absorb a competitor's differentiation into your platform.

  • Threat Acquisition: Harvesting can sometimes be a defensive move to acquire a company that is becoming a threat.

  • Market Enablement - preparing and priming the ecosystem so that harvested services and innovations are rapidly adopted and scaled.

⛅ Relevant Climatic Patterns​

📚 Further Reading & References​

  • Platform Revolution by Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul Choudary. A comprehensive guide to platform business models.
  • The Business of Platforms by Michael A. Cusumano, Annabelle Gawer, and David B. Yoffie. Explores the strategies of platform companies.

Author

Dave Hulbert
Dave Hulbert
Builder and maintainer of Wardley Leadership Strategies