Most of the stuff I write is classical strategy schtick in a different outfit. At the end of the day supply and demand is what it is, and there are only so many ways you can make a business work.
But there are a couple of exceptions…
There are a couple of places where I differ from the other gurus. A couple of points that, whenever I bring them up, tend to get pushback. Deviations from the path which are not merely stylistic, but technical.
And perhaps the most prickly one?
My opinion that you cannot new forms of value and strategic leverage from research, or “speaking to your customer”.
First, let me get the obligatory caveats out of the way:
- This is not the same as saying that you shouldn’t do research, or speak to your customers. Of course you should. You should know the absolute maximal amount about them and about your category. That is table stakes, and that is what you should do before starting to strategies, as well as after in order to validate your ideas.
- I am also not saying that you never get breakthroughs via this approach. It happens. It has happened to me. Sometimes there are just open goals sitting there for the taking. What I’m saying however is that you probably won’t get them this way – and then if that happens, you’re stuck. You’ve bled them dry and still have no ideas.
My position is simply that a more fruitful way of generating new value and breakthrough insights is to explore the negative space left by competitors. To start with finding difference and innovation – and then mapping that onto customer needs.
Why is this the case?
Simple: because most of the low hanging fruit has been picked. We are no longer in an age of supply constraints. Pretty much every category is crowded, and every customer need has been solved 10 times over. All the apparent “problems” you can find are either a) already being solved, or b) are in some way seen as impossible to solve within the current understanding of the category.
(Yes, I’m aware that genius-level researchers will have a better shot at wriggling past these issues, but either you can’t afford them, or they’re already working with your competitors so you’re back to square one).
Still not convinced?
Then let me direct you to exhibit A: Liquid Death.
Liquid Death is significant. Not because it is especially brilliant. Not because it is especially successful. And not because the strategy is especially smart.
No, it is significant because of one crucial thing:
It is pointless.
Pointless as in this is a product that categorically did not need to exist. It solves nothing. Nobody was asking for it. If I’d told you the idea pre-launch you would have laughed at it. And yet here we are with a new water for-heavens-sake with a $700m valuation.
This pointlessness means that this is an idea that is somehow “immune to research”. You couldn’t come up with it as a “solution” to something, you could only come up with it as a differentiated idea that generates its own demand.
There are some apocryphal post-rationalising stories about how the idea arose from the founder seeing people at concerts pouring water into beer cans so they could look cool while not drinking – but this is kinda nonsense. First, this product is not selling into that weird niche, it’s selling vastly wider. Second, it hardly does the job of disguising the water, because everyone knows what it is. And third, the real breakthrough for the brand came from a funny viral video about the idea which they made before they were even taking it seriously as a business.
The bottom line here is that people wanted this when they saw it – not before.
And this tends to be the sort of idea that gets traction in 2024. Not necessarily “silly” ideas like Liquid Death – but demand generating innovations.
Liquid Death is hardly alone in this, it’s just a particularly extreme example. Most great brands, if you look at their histories, were demand generating. This is why Steve Jobs said people don’t know what they want until you show it to them. This is why Henry Ford said people wanted faster horses.
It’s all the same stuff.
You create space, rather than filling space.
The real reason this approach is so important however is a purely practical one: there are no limits to the number of ideas you can generate. There is always a status quo to subvert.
This is why Rory Sutherland said “there are more good ideas you can post-rationalise than pre-rationalise”.
What he meant by this is that the pre-rationalised path (e.g. the customer problems one) necessarily funnels you down a limited set of options, whereas if you start more “random” there are unlimited options, many of which can be made to fit the facts after you’ve come up with them.
The process I suggest is as follows:
- Understand your market and customer as much as possible (yes, research).
- Then generate ideas by subverting the competition and sacrificing conventions.
- Then cross reference the intuitively powerful ideas against your research (and maybe do some validation research).
- Then press on when something fits.
You are not abandoning research.
You are just not expecting it to do the thinking for you.
YOU must do that. You must use your taste, your judgement, your creativity to come up with something good – not just rely on it jumping out at you from a page of numbers.
If you agree, then you’ll love The Strategy Shortcut System, because this is the kind of counter-intuitive knowledge it’s full of.
I will be doing the public launch of this next week – stay tuned.
