Relationships: The Edges of Ecosystems

Ecosystems are networks united by a common characteristic, and networks are made of nodes and edges. If Assets are the “nodes” that make up ecosystems, such as the People, Organizations, and Resources, then Relationships are the “Edges” within the network that unite these things together.

Relationships are simply the ways different assets relate to each other within an ecosystem, such as whether an organization “sponsors” a resource, a person “is employed by” an organization, or an organization is “funded by” another organization. Like Assets, Relationships have different characteristics that define what these relationships are, how they function, and how they impact ecosystems.

The four most important characteristics of relationships are their Type, Category, Direction, and Strength.

Relationship Types

The two main types of relationships within ecosystems are formal and informal. Formal relationships are codified in some way - whether through a contract, a partnership agreement, an employee agreement, or any other mechanism that formally establishes a relationship between two assets.

Informal relationships, on the other hand, are not codified, but they rather arise and exist naturally. Informal relationships are obvious in some situations (like “Mike is a friend of Joe”), but less so in other situations (such as “EcoMap is a competitor to EcoLack” - no one formalizes being a competitor, but it is an obvious and real relationship nonetheless).

There is some grey area between formal and informal relationships - for example, does a partnership announcement constitute the codifying of a relationship? Despite this ambiguity, defining formal & informal relationships is key to understanding how a given ecosystem may function.

Typically, formal relationships between assets outline specific ways in which each should behave in the relationship - such as an organization being required to pay an employee who is in turn required to do the work specified in the employment contract. Informal relationships tend to lack such behavioral agreements or expectations - meaning that there is a lot more flexibility in how each asset might behave in relation to the other.

Both Formal and Informal relationships can be broken, but typically formal relationships are “formally” broken - both parties are aware when the formal relationship dissolves, and typically that formal relationship is either replaced with an informal one (like ‘business partners’ going to ‘friends’), or it is replaced with a different formal relationship (such as a person signing an NDA with their former employer). Informal relationships are much easier to both change and dissolve, because of their lack of codification.

Relationship Categories

While relationship types indicate whether or not a relationship has been formalized or codified, relationship categories give you actual information about what the relationship is - it describes “how” two things are related. Unlike types, there are a large number of relationship categories, and they vary based off of the ecosystem.

Here are some examples:

• Funding Relationships: Asset A “Funds” Asset B
• Partner Relationships: Asset B “Is Partners with” Asset C
• Employment Relationships: Asset C “Employs” Asset D
• Transactional Relationships: Asset D “Buys” from Asset E
• Provisional Relationships: Asset E “Provides” Asset F

While some relationship categories tend to fall under a specific relationship type (hopefully, for example, Funding relationships are Formal), there are no hard and fast rules - someone could cut a check to a startup without any documentation, or enter into a verbal partnership without a partnership agreement.

Relationship Categories simply provide more information about the nature of the relationship between two assets, regardless of whether or not that relationship has been codified or no, and they are key to understanding the functioning and makeup of a given ecosystem.

Relationship Direction

The direction of a relationship is a way to indicate how each asset within the relationship experiences it differently.

For example, a startup that is funded by a venture capital firm has a “funding relationship” with the firm, just as the firm has a “funding relationship” with the startup. However, the startup experiences this relationship differently - they receive funds (and oversight), whereas the firm provides funds, and hopefully gains a larger return in the long run.

In other scenarios, both assets experience the relationship in largely the same way. For example, if EcoMap competes with EcoLack, and EcoLack competes with EcoMap, even if one company dislikes the other more, or if one is winning in the market, the relationship is more or less experienced the same between the two assets, and there is not much use to trying to specify a direction between it.

In this way, specifying the directionality of a relationship becomes most important when there is a material difference between how each asset experiences the relationship. The specificity is needed to understand the nature of many relationships, such as in a grantor-grantee relationship. In the diagram above, the first image doesn’t convey very helpful information about what Asset A is vs what Asset B is. But as soon as you add a direction to the relationship, it becomes clear that Asset A is the grantee, and Asset B is the grantor - regardless of which way you define the direction.

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Relationship Strength

The strength of the relationship is a measure of how much influence each asset has on another due to the existence of the relationship.

We have an inherent understanding of “weak vs strong” relationships, which are often referred to as “thin vs thick edges” in networks. You have a strong relationship with your best friend, and weak relationships with your acquaintances. A grantor has strong relationships with its grantees, but weaker relationships with all of the other organizations who have applied for, but not received, funding.

Relationship Strength varies substantially from the other characteristics of relationships. Unlike Category, Type, or Direction, relationship Strength is pretty hard to measure generically (that is, you can create a measure of strength on a per-ecosystem basis, but it’s nearly impossible to uniformly define a measure). Additionally, the strength of a relationship can change over time without any intervention or modification of structure (which tends to be required for the category, type, or direction of a relationship to change).

Despite the difficulty in measuring and tracking relationship strength, it is nonetheless extremely important to the understanding of ecosystems. Weak relationships can be broken more easily, and in ecosystems with stronger relationships, information flows more quickly. If there are a group of assets with very strong relationships with each other, they are considered a cluster. However, that group of assets is only at risk of becoming a silo if those assets lack strong relationships with other parts of the ecosystem (more on this later).

By this point, we’ve examined the basic ecosystem structure, and dove deep into the characteristics important to both Assets and Relationships. Now, we’ll look at the different attributes that define an ecosystem as a whole.

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