{"id":76676,"date":"2022-08-18T11:16:00","date_gmt":"2022-08-18T15:16:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=76676"},"modified":"2022-08-25T13:06:12","modified_gmt":"2022-08-25T17:06:12","slug":"creating-a-new-market","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/creating-a-new-market\/","title":{"rendered":"Creating a New Market to Become a Market Winner"},"content":{"rendered":"\n

What does it take to build a new market? What is the advantage of creating a new market?<\/p>\n\n\n\n

A new market should show that your product isn’t merely better than its competitors, but that it’s in an entirely different league. Creating a new market for your product is the only way you can become a market winner.<\/p>\n\n\n\n

Continue reading to learn why creating a new market is your best option, according to Play Bigger<\/em>.<\/p>\n\n\n\n\n\n\n\n

Defining Market Design and Market Winners<\/strong><\/h2>\n\n\n\n

Let\u2019s first define the authors\u2019 concept of market design<\/a> and the market winner. It\u2019s worth noting that the authors\u2019 work experiences come primarily from the tech industry. However, they stress that you can apply these lessons to any business. (Shortform note: The authors are likely correct in asserting that lessons from the tech industry can apply to more traditional companies, simply because the distinction between tech and non-tech businesses is becoming increasingly fuzzy<\/a>. Most modern companies\u2014like Goldman Sachs, GE, and Exxon\u2014classify themselves as \u201ctech companies,\u201d at least to a certain degree.)<\/p>\n\n\n\n

What Is Market Design?<\/strong><\/h3>\n\n\n\n

Market design is the act of creating an <\/strong>entirely new<\/em><\/strong> market for your product<\/strong>, claim the authors. <\/strong>You do this by devising a novel<\/em> solution\u2014not a solution that\u2019s just better<\/em> than other solutions\u2014to an existing or not-yet-existing problem, often completely altering peoples\u2019 lives and lifestyles and rendering old markets obsolete. <\/p>\n\n\n\n

The authors cite Uber as a company that created an entirely new market and solution\u2014ride-hailing services\u2014to solve a problem consumers didn\u2019t know they had: the challenge of finding a taxi when you need one. In Uber\u2019s case, it made traditional taxis (the old market) much less appealing and completely changed how people get around. <\/p>\n\n\n\n

When you engage in market design, you craft the market to specifically highlight <\/strong>your<\/em><\/strong> product\u2019s unique advantages and the problem it solves<\/strong>, contend the authors. No other company that enters the market will succeed as well as you because the market isn\u2019t designed to accentuate its advantages\u2014it\u2019s designed to accentuate yours<\/em>. This is in many ways easier than competing in a market that\u2019s saturated with recognized brands and that\u2019s not set up to highlight your product\u2019s assets or the problem it solves. <\/p>\n\n\n\n

Furthermore, when you establish a new market based on a new or existing problem, you won\u2019t need to work hard to convince consumers to buy from you, claim the authors. Once they recognize the problem your market will solve, consumers will clamor for a solution\u2014it\u2019s human nature to want to solve a problem, even if it\u2019s one they only just now realized they had. And since your company will be the only one offering any solution in that market (because you\u2019ve only just established it), they\u2019ll turn to you exclusively.<\/p>\n\n\n\n

However, if you create a new<\/em> market for your device, you can succeed<\/a> in it because you can design the market to highlight your product\u2019s unique features\u2014its relatively low tech capacity. You might thus create a \u201clow-tech devices\u201d market: a market for products that have more limited capabilities than standard smartphones, to solve the problem of tech overwhelm. And once consumers recognize that they, too, have tech overwhelm, they\u2019ll buy only from your company, because you\u2019re the only company around that can solve that problem for them. <\/p>\n\n\n\n

The Advantage of Market Design: You Can Become a Market Winner<\/strong><\/h4>\n\n\n\n

Designing a new market for your product gives you the greatest chance of becoming a <\/strong>market winner<\/em><\/strong>: the most recognized and trusted brand in a market<\/strong>, write the authors. Market winners often become synonymous with their entire markets and usually consume 70 to 80% of the market\u2019s profits and value. Because customers recognize these companies so well and identify them so closely with their market, it\u2019s nearly impossible to compete with them. You want to become a market winner because you\u2019ll be an indomitable force. <\/p>\n\n\n\n

Why Is Market Design Hard?<\/strong><\/h3>\n\n\n\n

As great as its benefits are, market design is also difficult for three reasons:<\/p>\n\n\n\n

Reason #1: You Must Build Your Company, Product, and Market Simultaneously<\/h4>\n\n\n\n

According to the authors, to design a new market and become its winner, you must build your company, market, and product <\/strong>simultaneously<\/em><\/strong> so they support and reinforce each other<\/strong>\u2014a colossal challenge for any company. When you can do this, a flywheel effect<\/a> occurs, wherein one part of the company boosts the next part, which boosts the third part, which boosts the first part, and so on. When this flywheel composed of company, market, and product spins fast enough, the company builds so much momentum that it becomes the unbeatable market winner.<\/p>\n\n\n\n

For instance, you might build your low-tech devices company, market, and product simultaneously by encouraging developers to think in a minimalistic way and to make only limited use of tech in their work because this approach is aligned with the product you\u2019re selling. You might also choose to employ more marketers than developers because your company\u2019s challenge won\u2019t be the development of the product\u2014in your case, relatively easy\u2014but rather the marketing of a product that\u2019s intentionally less advanced than others on offer. These choices about the company in turn improve the product and market design, which loop back and further improve the company\u2014thereby starting a flywheel. <\/p>\n\n\n\n

Reason #2: The Tendency to Settle for \u2018Better,\u2019 Not \u2018Different\u2019<\/h4>\n\n\n\n

Additionally, there\u2019s a strong pull to create a product<\/a> that\u2019s better\u2014not different\u2014in an existing market simply because doing so is easier than creating a different product in a new market<\/strong>, write the authors. <\/p>\n\n\n\n

This is because, at some point in the inception of a new business, the daily demands of running it begin to take priority over the bigger-picture concerns of market design and aligning company, market, and product in service of building a new market. What\u2019s more, businesses experience financial pressure to make a profit now by catering to existing customer needs and problems instead of bringing in greater profit later by creating a whole new market. All this leads to the tendency to simply build a good-enough product that can compete in an existing market but won\u2019t ever make you a market winner. <\/p>\n\n\n\n

For instance, when setting up your low-tech device company, investors may pressure you to add high-tech features to your product so it can compete with other smartphones, and customers might also clamor for such features because they want a product that\u2019s akin to other products they\u2019re familiar with and don\u2019t realize they have a problem of tech overwhelm. Heeding these voices, however, would prevent you from establishing a new market for low-tech devices and making yourself its winner. <\/p>\n\n\n\n

Reason #3: Consumers Hesitate to Embrace New Solutions<\/h4>\n\n\n\n

The final reason designing and winning a market is hard is because it\u2019s difficult to get consumers to embrace a new solution or market<\/strong>, write the authors. Humans have a natural tendency to want to maintain the status quo, and it takes significant effort to shift consumers\u2019 thinking from acceptance of the way things are now to an understanding of how things could be improved. <\/p>\n\n\n\n

When you design your market, as we\u2019ll discuss in the next part, you\u2019re responsible for shifting consumers\u2019 mindsets from the status quo to embracing the new possibilities your market and product provide<\/strong>. At your low-tech company, you\u2019ll need to show consumers how the status quo\u2014constant smartphone use\u2014is a problem and how life could be better if they weren\u2019t so engrossed in their phones. <\/p>\n","protected":false},"excerpt":{"rendered":"

What does it take to build a new market? What is the advantage of creating a new market? A new market should show that your product isn’t merely better than its competitors, but that it’s in an entirely different league. Creating a new market for your product is the only way you can become a market winner. Continue reading to learn why creating a new market is your best option, according to Play Bigger.<\/p>\n","protected":false},"author":14,"featured_media":49477,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[45,79,104],"tags":[725],"class_list":["post-76676","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-entrepreneurship","category-marketing","tag-play-bigger","","tg-column-two"],"yoast_head":"\nCreating a New Market to Become a Market Winner - Shortform Books<\/title>\n<meta name=\"description\" content=\"Creating a new market can be hard, but it'll be worth it in the end. 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