Complements
Value pools shift. The question is whether you’re moving them or being moved.
A streaming service watches broadband speeds triple. Their product hasn’t changed, but suddenly customers value it more. They can stream in 4K without buffering. The broadband providers did the work; the streaming service captured the value.
That’s complements. When the price of a complement falls — or its quality rises — willingness-to-pay for your product increases. Cheap petrol makes cars more valuable. Great apps make phones more valuable. Fast internet makes everything online more valuable.
Most strategists optimise their own product and miss this entirely. They’re so focused on their slice that they don’t notice the profit pool shifting beneath them.
The Asymmetry
Complements create an asymmetry worth exploiting. If you can make a complement cheaper or better, you raise demand for your product without touching your product at all.
Apple doesn’t make most iPhone apps, but the App Store ecosystem raises what people will pay for iPhones. Amazon doesn’t make most products on its platform, but third-party sellers raise what customers will pay for Prime. The companies winning this game invest in complements they don’t even own.
The reverse is also true. If someone else controls a complement you depend on, they can extract the value you create. Suppliers of complements often become competitors — or acquirers.
Strategic Options
When you identify a complement, you have four moves:
Give it away. Make the complement free to drive demand for your main product. Razor companies perfected this. So did gaming consoles.
Own it. If the complement is valuable enough, acquire or build it. Control the whole system. Apple’s hardware-software integration is this strategy at scale.
Commoditise it. Make the complement available from multiple sources so no single supplier has leverage. Open standards are often a commoditisation strategy in disguise.
Bundle it. Package complement and product together so customers can’t separate them. This shifts competition to the bundle level, where you may have an advantage.
Each choice reshapes the profit pool. The question isn’t which is best — it’s which fits your position and capabilities.
Finding Your Complements
Complements hide in customer journeys. They’re often things that seem unrelated to your core business.
What do customers use before, during, or after using your product? What else do they buy in the same decision? What infrastructure do they need to get value from what you sell?
A project management tool’s complements include team communication apps, file storage, and calendar systems. A restaurant’s complements include parking, childcare availability, and even the quality of nearby shops. A B2B software product’s complements include the consultants who implement it and the analysts who recommend it.
Map those complements. Ask which ones are getting better or cheaper — and who’s capturing the value that creates. If it’s not you, decide whether that’s a problem worth solving.
Related: The Value Stick · Real Choices · Reading Guide
Connects to Library: Complements