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When Ecosystem Strategy Meets CVC Logic: New HBR Article on Business Model Innovation

New article published in the Harvard Business Review, by Tony Tong of the Leeds School of Business, discusses how Xiaomi redefined what it means to be a platform company by blending two distinct business models—ecosystem and corporate venture capital—into one in today’s digital age.

Summary. Traditional platform businesses generally fall into one of two categories: Ecosystems, such as Apple’s App Store, which offer limited resources to a wide array of independently-run firms; and Corporate Venture Capital (CVC) companies, such as Intel Capital, which invest heavily into a small number of ventures that promise either financial or strategic returns. However, new research into Xiaomi’s growth strategy suggests that the Beijing-based electronics giant has developed a blended approach, borrowing elements of both traditional ecosystem and CVC firms to create a broad ecosystem of strongly-supported partner ventures. Based on a series of in-depth interviews with executives from both Xiaomi and its partner companies, the authors identify three factors that have enabled this novel business model.

How Xiaomi Redefined What It Means to Be a Platform