{"id":76678,"date":"2022-08-17T11:15:00","date_gmt":"2022-08-17T15:15:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=76678"},"modified":"2022-08-25T13:06:10","modified_gmt":"2022-08-25T17:06:10","slug":"what-is-market-design","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/what-is-market-design\/","title":{"rendered":"What Is Market Design? The Art of Creating Markets"},"content":{"rendered":"\n<p>What is market design? Why would you want to <a href=\"https:\/\/www.shortform.com\/blog\/creating-a-new-market\/\">create a new market<\/a>?<\/p>\n\n\n\n<p>If you want to stand out from other companies, you should consider market design. The marketing book <em>Play Bigger<\/em> describes it as the act of creating an entirely new market for your product.<\/p>\n\n\n\n<p>Find out more about the concept of market design below.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-market-design\">Market Design<\/h2>\n\n\n\n<p>What is market design? <strong>Market design is the act of creating an <em>entirely new<\/em> market for your product<\/strong>, claim the authors.<strong> <\/strong>You do this by devising a <em>novel<\/em> solution\u2014not a solution that\u2019s just <em>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.&nbsp;<\/p>\n\n\n\n<p>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.&nbsp;<\/p>\n\n\n\n<p>When you engage in market design, <strong>you craft the market to specifically highlight <\/strong><strong><em>your<\/em><\/strong><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 <em>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.&nbsp;<\/p>\n\n\n\n<p>(Shortform note: In <a href=\"https:\/\/shortform.com\/app\/book\/crossing-the-chasm\"><em>Crossing the Chasm<\/em><\/a><em>, <\/em>Geoffrey Moore argues the opposite point. While the <em>Play Bigger<\/em> authors contend that you should create a new market, Moore believes you shouldn\u2019t try to <a href=\"https:\/\/www.shortform.com\/blog\/career-progression-plan\/\">position yourself<\/a> in a not-yet-existent market because mainstream users will have a hard time understanding the market and won\u2019t want to buy your product. He claims <a href=\"https:\/\/shortform.com\/app\/book\/crossing-the-chasm\/chapter-6#step-1-identify-your-competitors\">you must identify some competition to your product to give customers the context<\/a> they need to understand and want to buy it. In this way, Moore views competing brands and existing markets as aides to consumer comprehension rather than as obstacles to your success, as the authors see them.)<\/p>\n\n\n\n<p>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<p>However, if you create a <em>new<\/em> market for your device, <a href=\"https:\/\/www.shortform.com\/blog\/believe-you-can-succeed\/\">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.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-advantage-you-can-become-a-market-winner\"><strong>The Advantage<\/strong>: <strong>You Can Become a Market Winner<\/strong><\/h3>\n\n\n\n<p><strong>Designing a new market for your product gives you the greatest chance of becoming a <em>market winner<\/em>: 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","protected":false},"excerpt":{"rendered":"<p>What is market design? Why would you want to create a new market? If you want to stand out from other companies, you should consider market design. The marketing book Play Bigger describes it as the act of creating an entirely new market for your product. Find out more about the concept of market design below.<\/p>\n","protected":false},"author":14,"featured_media":63743,"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-76678","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":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What Is Market Design? The Art of Creating Markets - Shortform Books<\/title>\n<meta name=\"description\" content=\"Market design is a bold way of making your company competitive. 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