Complementarity exists when two or more products, capabilities or activities create more value because they work together.
It is one of the main reasons ecosystems exist.
A customer may want an outcome that depends on several organisations contributing different pieces. Those pieces are not simply collected in one place. Their value depends on how they fit together.
A smartphone becomes more useful because of applications. Applications become more valuable because they can reach smartphone users. Charging infrastructure makes electric vehicles more useful. More electric vehicles can make investment in charging more attractive.
The relationship between the parts creates additional value.
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Are all things used together complements?
No.
This distinction matters.
Two things can be used together without creating the kind of interdependence that makes an ecosystem strategically interesting.
Tea, hot water and a cup are complements to a consumer, but they can normally be bought separately from ordinary markets. Their producers do not need much specific coordination with one another.
Ecosystem research pays particular attention to nongeneric complementarity.
This occurs when participants need some degree of alignment, adaptation, shared standards or specific investment for their contributions to work together.
That additional dependence is what turns complementarity from a simple purchasing choice into an ecosystem issue.
What kinds of complementarity matter in ecosystems?
Two forms are especially useful.
The first is unique complementarity.
One component is needed for another to work properly. An application written for a particular operating system depends on that system. The dependence may run in one direction or both.
The second is supermodular complementarity.
More or better of one contribution increases the value of another.
More useful applications can increase the value of an operating system. A larger installed base can make developing an application more attractive.
These forms can occur together.
The exact label matters less than understanding the mechanism:
What becomes more valuable because these participants combine their contributions?
Why does complementarity create both value and risk?
Because the same relationship that creates additional value can create dependency.
If your offer becomes much more valuable when combined with another participant’s capability, you may become exposed to that participant.
If its quality falls, your value may fall.
If it becomes scarce, it may gain bargaining power.
If it changes its interface, you may have to adapt.
This is why complementarity links directly to bottlenecks, strategic dependencies and value capture.
The strongest ecosystem relationships often create real mutual value.
They also need careful design because the participants become less independent of one another.
How is complementarity different from a network effect?
Complementarity is about how different contributions work together.
A network effect is about how the value of participation changes as the number or mix of participants changes.
The two often interact, but they are not the same.
An electric vehicle and a charging service are complementary even before a large network develops.
If adding more charging locations makes electric vehicles more attractive, and more vehicles make charging investment more attractive, network effects may then reinforce that complementarity.
Keeping the concepts separate helps identify the actual source of advantage.
Otherwise almost any successful ecosystem can be described vaguely as having network effects.
How should a company use complementarity strategically?
Do not begin by asking how many partners you can attract.
Ask which combinations create meaningful additional value.
Then examine what has to be true for that value to appear.
Do the products need a common standard?
Does one participant need to invest first?
Does quality in one component affect the other?
Can either contribution be replaced easily?
Who captures the additional value created by the combination?
This turns complementarity into a strategic question rather than a description.
The best ecosystem is not the one with the most relationships.
It is the one where the right relationships make the combined offer materially better.
Related concepts
Ecosystem Value Creation
Network Effects
Strategic Dependency
Ecosystem Bottleneck
Ecosystem Architecture
Modularity
Ecosystem Advantage