Have you ever tried to come up with a business plan for a new product, service or enterprise? Ever thought about disrupting the market with a new or improved product or service? Even if youre 100% convinced on your ability in understanding customer needs, its pretty difficult to predict success, isnt it?
Outcomes of traditional research with focus groups is far from reliable
People whove been taught or groomed in the corporate world, would probably still use one of the available modules to strategize their new business model. While some of these models could definitely help in defining a possible direction, more than often it also creates the illusion of some form of security; weve filled in all the checkboxes, so were good. The new business is going to be a big success.
Really? Dont think so
Luckily, theres a solid and reliable way to predict the future: consumer research. We can simply ask consumers or businesses if they would buy a product or service, right?
Another big No
Im not a big fan of paraphrasing Steve Jobs, but he was pretty accurate about a lot of things and this one still resonates with me: people dont know what they want until you show this to them. Moreover: Ive organised and/or participated in over 50 focus groups-like research projects, all with one key objective at the back of my mind: understanding consumers desires or needs.
I would be lying by saying this has not helped me at all in channelling my thoughts, which eventually was the foundation for possible strategies. However, the outcome of some of these research projects have also been a bit disappointing. With one key reason: If one would ask consumers to think about their own behavioural patterns, the answers would not always be truthful.
The most important reason: human beings are not very accurate in predicting their own behaviour.
Imagination: to produce and simulate novel objects, sensations and ideas
Luckily theres a pretty powerful method in predicting consumer behaviour: imagination. It was Albert Einstein who once said: The true sign of intelligence is not knowledge but imagination, and I couldnt agree with this more.
Frankly, Ive used a lot of imagination during my career. Its not only very helpful, but also fun. However, imagination doesnt come to one easily. Its important to create a comfortable setting to make this happen.
But first, let me share some of my thoughts about imagination itself. And before sharing my own perspective I would like to share Wikipedias first phrase about this word: Imagination is the ability to produce and simulate novel objects, sensations, and ideas in the mind without any immediate input of the senses.
In my perspective, this is a spot-on way of explaining imagination. But theres also a huge flaw. My biggest objection: the part where Wikipedia says one should not receive any immediate input of the senses. Yes, I also believe Imagination only works very well if a person can be totally distracted from the current mindset and outside world.
However, I think its fundamental to start the imagination with various inputs.
Example on how to use imagination
Let me explain this with a real life example. Im currently part of an extensive course on Digital Transformation. The course is offered by IIMB in Bangalore, one of the leading business schools in India.
A crucial element of the curriculum is the part where the professors assign participants to be part of a smaller group. The key objective of this is simple: try to identify anything that could be digitally transformed.
Im part of a group with an ambitious aim: we want to empower local farmers by offering them a platform to sell larger quantities of their crops directly to consumers.
Its been really enriching to work on such an ambitious project. Constantly shifting the topic from finance to regulations, technology and logistics really pushes me to delve into less common areas of business.
It also definitely helped to rely on others in my group for some fresh insights. But imagination also helped a lot.
Ive used imagination to define a draft of the customer journey and Im pretty sure its accurate. The process itself was easy. With only a pen, paper and a lot of sticky notes I tried to reimagine all the steps within the process.
Yes, I initiated to myself some context and boundaries. But the rest was pure imagination. The proof of the pudding is in the consumption, but without patting myself too much on the back Im positive about the outcome.
Prediction of success with imagination
Pulling myself into an imaginary mindset to think about a possible customer journey is very concrete. But what about using ones imagination to predict the entire business model?
This is an entire different conflict. But its also possible. You could describe it sd this: its a comprehensive thought out experiment, almost like conducting a human simulation.
If you want to explore this path, its crucial to keep everything which surrounds the business in mind: the possible competition, consumer behaviour, how the products or services are currently being sold and much more.
And now the most crucial part: dont mix up opportunistic beliefs with actual imagination. I know this is hard, but you really need to imagine a situation as if the business is operational. And the big question here is this: are people really standing in line to buy it? And if yes, why?
One even better prediction: doing it and/or data
So, am I advocating to use imagination as a key factor for decision making? Haha, not at all.
Of course not, because theres an even better way to predict the future: just doing it and/or data. And despite this, I dont think a lot of CEOs will approve of any plan based purely upon imagination as a sole predictor
So, Product Manager.why should we invest one million in this new service? Well, sir.I just went out for a walk in the park and I really believe this will work.
Let me explain. Even with the best imagination in the world, its hard to predict if a buy button on a sales webpage should be placed next to the image of the product/service or should it be placed somewhere else. And what about pricing? Would it be more profitable to set the price of a new service at 5,- euro a month or at 6,- euro a month?
Its very challenging to solve these kind of business dilemmas with just imagination. But theres something better: running actual experiments.
In the internet era, its very easy to perform a lot of experiments. The a/b test is the hallmark of the experiment and there are at least more than a thousand of these a=/b tests on the Amazon website at any given time.
But theres a major issue here; its simply impossible to conduct an experiment for each idea. Sometimes it just requires a lot of confidence and the right number of balls to just do it.
Conclusion:
While the gold standard of predicting the future of business is real behavioural data, its not always possible to obtain this. The next best thing is to have as much real data as possible.
And after this, I would prefer to use imagination. Of course, the imagination should be supported by a lot of facts. If theres already a lot of competition in the various market segments, this should already have been part of your imagination journey.
Are you convinced still about future business luck, the why dont you give it a try.
