Can entrepreneurs and companies predict the future?

At first glance, it would certainly seem so simply based on the number of companies that have come out of nowhere and quickly risen to dominate their market segment. Companies such as Segway, Tesla, GoPro, and Pokemon among others seem to have just suddenly appeared with stunning new products and become an overnight success.

The common - and flawed - assumption is that somehow these companies knew exactly what product to introduce at exactly the right time based on some arcane ability to predict future consumer demand. However, this could not possibly be farther from the truth, and what really happened in each of these examples is both surprising and obvious at the same time.

What is happening instead is a simple misunderstanding of the rules of cause and effect. You see the new product or app that's suddenly taken the world by storm and wonder 'How did they know that this was the right time and the right market for that product?"

What you should be asking yourself is 'How did they know this product was needed?"

The answer to that question is the key that unlocks the secret of seemingly overnight success.

First, notice what each of these companies, and scores of other successful startups have in common. They did not introduce a new, improved version of a product into a stale, pre-existing market segment - they introduced a completely new product in a completely new market segment. By basically inventing the product that defined the segment, they guaranteed themselves a major piece of the market, time to get their product into consumer's hands before their competitors could do the same, and an automatic inflated consumer demand in a market with no immediate competition.

A prime example of this principle in practice is GoPro. There was no pre-existing market, or appreciable consumer demand, for small, rugged wearable cameras. There was no market, no market niche, and no measurable consumer demand because no one had invented the product yet. No one can say that GoPro simply came along at the right time to take the market for themselves, which would be expected if entrepreneurs could actually predict the future.

Instead what happened is that after a considerable amount of research and testing, GoPro decided to release their first wearable camera. GoPro created the product and the market, and then they created consumer demand. Creating this demand was as simple as encouraging competitors in the X-Games to and similar sporting events to wear their cameras and to share to share their videos online.

Once this demand was created, the market segment, and GoPro's success, was guaranteed. As buyers began finding exciting new uses for the cameras, market demand exploded. The end result is that GoPro went on to dominate the activity camera market for quite a while despite increasingly strong competition.

Predicting the future i s not the answer to making your company a success.

The real answer is a simple as good market research, dedication to deliver what the research says that consumers want, and the ability to encourage a marketing environment around that market. Do this correctly, and you will create the perfect illusion of predicting the future.

Published on: Jul 25, 2016