Ecosystems appear to progress through four stages as they grow and mature:

(Note: I think the research ecosystem follows this as well…)

1. First come a handful of pioneers to the ecosystem – the ones who show everyone that something is possible or popular. These companies either fail or become entrenched market leaders – there is no middle ground, as the winner will become synonymous with the market. It is possible for a company to “win” a small market but fail to grow it into a new paradigm – in that case, the market will remain relatively stagnant until a pioneer with a larger vision or better ability to execute grows it. At least one pioneer must achieve both a strong market presence and a solid trajectory for the ecosystem to achieve the wild growth and optimism characteristic of the next stage.

These companies are distinguished by the novelty of their markets, and by their brand’s synonymous association with those markets. Their primary form of innovation is opening up and capturing completely new market segments.

Friendster, MySpace, Facebook, Groupon, and YouTube are examples of these types of companies. So are RIM and Palm, which captured the early mobile market but were unable to grow mobile beyond a niche product (ultimately, I categorize these as failures, and Apple as the first successful pioneer in this market).

2. Next come the clones. The successes of the pioneers spawn explosive growth, both general-purpose “me too” offerings and niche-targeted variations. These will very rarely displace the entrenched players; more often they become secondary offerings with lesser brand value, leading to fragmentation of the market. Some niche players, such as LinkedIn, can become surprisingly large – often this is the case when the leader’s niche poorly overlaps with the newcomer’s. It’s common for established players in adjacent markets to see the growth of the new area, and enter with their own offerings at this stage.

These companies are primarily valued for their brand recognition by consumers (since the space is becoming increasingly crowded at this point). They innovate by addressing specific market needs which were suboptimally fulfilled by market leaders, as well as leveraging their existing audience to gain traction in the new space.

Amazon Local, Gilt Groupe, Google+, LinkedIn, and Etsy are examples.

3. So many clones establish themselves that there’s now market value in aggregating/centralizing the results. So market plays at unifying the entire ecosystem are next to emerge on the scene.

These companies are distinguished by the comprehensiveness of their feeds or offerings. Their primary form of innovation lies in establishing the partnerships and integrations necessary to unify an at-this-point extremely diverse ecosystem. Occasionally one will emerge with a value-add enabled by the integrated nature of the data.

This focus on comprehensiveness typically leaves aggregators little room for optimizing consumer interaction/*delivery* of content. They become providers of unified data streams, and eventually provide platforms for accessing those streams.

Mamma.com and other “meta-search” engines are examples. Yipit and 8coupons fall into this role, as do Gigya, TweetDeck, Trillian, and Zillow.

4. Finally, the delivery experience is optimized. The core value proposition of the industry is at this point saturated and nobody wants to hear of “another X”, but the centralization of the ecosystem affords newcomers a clear path to the market’s table stakes, allowing them the luxury of focusing entirely on optimizing *how* consumers interact with the data or product.

These companies are distinguished by their user experience, consumer reach, and new angle on an old technology. They innovate by reaching consumers (both qualitatively and quantitatively) more effectively than other players in the industry and by seeding new adjacent markets which spin off around the delivery technology itself – which can open up new markets and cause the cycle to repeat.

“Demand Side Platforms” in advertising such as Invite Media and MediaMath are examples. So are Square, Shopify, Wix, and Tinder.