Evolution Stages
The four stages that all components go through: Genesis, Custom Built, Product, and Commodity.
Term Details
Evolution Stages
Evolution stages are the four predictable phases that all components in a value chain go through: Genesis, Custom Built, Product, and Commodity.
Understanding evolution stages is fundamental to Wardley Mapping. Every component in your value chain evolves through these four stages, and this evolution helps you anticipate what is possible. This drives strategic decisions about where to invest, how to compete, and what to expect in the future.
The Four Evolution Stages
1. Genesis
Novel, uncertain, constantly changing
Genesis components are new and unfamiliar. They represent emerging technologies, novel business models, or innovative approaches that are still being developed and refined.
Characteristics:
- Novel and experimental
- Uncertain outcomes and applications
- Constantly changing and evolving
- High risk, high potential reward
- Limited availability and understanding
Examples:
- Emerging technologies (quantum computing)
- New business models (metaverse commerce, decentralized finance)
- Novel customer needs (virtual reality experiences, sustainable alternatives)
Strategic Focus:
- Innovation and experimentation
- Early adoption and learning
- Building capabilities for future advantage
2. Custom Built
Growing, becoming more defined, scarce
Custom Built components are maturing and becoming more understood. They're still relatively scarce and valuable, but their purpose and capabilities are becoming clearer.
Characteristics:
- Growing adoption and understanding
- Have to built for you, not generally available
- Scarce and valuable
- Building competitive advantage
- Increasing investment and development
Examples:
- Specialized software platforms
- Unique customer experiences
- Proprietary processes and systems
Strategic Focus:
- Building capability and differentiation
- Creating competitive advantage
- Investing in scarce resources
3. Product
Stable, well-defined, widely available
Product components are mature and well-established. They're widely available from multiple providers and have clear specifications and capabilities.
Characteristics:
- Stable and reliable
- Well-defined specifications
- Widely available from multiple providers
- Competitive market
- Standardized approaches
Examples:
- Standard software applications
- Established business processes
- Mature technologies and platforms
- Common industry practices
Strategic Focus:
- Optimization and efficiency
- Market positioning
- Cost management
4. Commodity
Ubiquitous, standardized, utility-like
Commodity components are ubiquitous and standardized. They're available everywhere, have consistent specifications, and function like utilities.
Characteristics:
- Ubiquitous availability
- Standardized specifications
- Utility-like reliability
- Low cost and high efficiency
- Minimal differentiation
Examples:
- Basic infrastructure (electricity, internet)
- Standard services (hosting, storage)
- Common business functions (payroll, accounting)
- Commoditized technologies
Strategic Focus:
- Cost efficiency and scale
- Outsourcing and standardization
- Focus on higher-value activities
Evolution and Strategic Decisions
Understanding evolution stages helps answer critical strategic questions:
Where Should We Invest?
Focus on components in Genesis and Custom Built stages, where you can create competitive advantage through innovation and differentiation.
What Should We Outsource?
Consider components in the Product and Commodity stages, where standardized solutions are available and cost-effective.
How Do We Compete?
Differentiate on evolving components (Genesis, Custom Built), optimize on stable ones (Product, Commodity).
What's Changing?
Monitor components moving between stages to anticipate opportunities and threats.
Evolution Patterns
Technology Evolution
Evolution of Electricity
- Genesis – Baghdad Battery (~200 AD): novel, uncertain experiments.
- Custom-Built – Faraday Generator (1831): first working prototypes.
- Product – Hippolyte Pixii (1832): machines sold and replicated.
- Commodity/Utility – Electrification (19th c – now): standardized, ubiquitous, invisible until it fails.
Business Model Evolution
This shows the path:
- Genesis – Lending starts as personal trust between individuals.
- Custom-Built – Early structured banking emerges in places like Florence or Venice, family-run, experimental.
- Product – National banks form, offering standardized products like notes, deposits, and credit at scale.
- Commodity/Utility – Modern regulated banks operate as utilities of the financial system: essential, standardized, and tightly governed.
Strategic Implications
1. Investment Timing
Invest in components when they're in Genesis or Custom Built stages to maximize competitive advantage.
2. Competitive Positioning
Position yourself on evolving components where you can differentiate, not on commoditized components where you can only compete on cost.
3. Risk Management
Genesis components are high-risk but high-reward. Balance your portfolio across different evolution stages.
4. Resource Allocation
Allocate resources based on evolution stage - innovation resources for Genesis, capability building for Custom Built, optimization for Product, and efficiency for Commodity.
Key Insights
- Evolution is inevitable - All components eventually move toward Commodity stage
- Timing matters - Investing at the right stage creates maximum advantage
- Multiple stages exist simultaneously - Different components in your value chain are at different stages
- Evolution creates opportunities - Changes between stages create strategic openings
- Understanding evolution reduces uncertainty - You can anticipate changes and prepare accordingly
Application to Mapping
When creating Wardley Maps, position each component according to its evolution stage:
- Genesis components go on the far left
- Custom Built components go in the middle-left
- Product components go in the middle-right
- Commodity components go on the far right
This positioning helps visualize strategic opportunities and threats across your value chain.
Conclusion
Evolution stages provide a framework for understanding how components change over time. This understanding is fundamental to Wardley Mapping and strategic thinking. By recognizing where components are in their evolution and anticipating where they're going, you can make better strategic decisions about where to invest, how to compete, and what to expect in the future.
Understanding evolution stages is crucial for effective Wardley Mapping. Learn more about value chains and how they relate to evolution, or explore our case studies to see evolution in action.