Use imagination to create product-market fit.
A recent analysis from CB Insights revealed that not being product-market fit is the most common reason for startup failure. A staggering 42% of failing startups point to lack of product-market fit as their reason for failure. If this is not terrifying enough, the analysis shows that out of the 20 most common reasons for startup failure, 11 of them are directly related to not being able to drive, meet and match market demands.
Building digital businesses and brands that can enter the market with power. Certain of market needs, customers and direction are more important than ever. And more complex than ever due to COVID-19.
The expression “VUCA world” was first used in 1987 related to the leadership theories of Warren Bennis and Burt Nanus. Subsequently, it was adopted by the U.S. Army to reflect the world after the Cold War. Later it travelled into business and has been widely used (and overused) to express the amount of change and uncertainty companies and leaders face and must respond to.
If there is ever a time for applying the acronym with all its meaning, it must be in the current situation of Corona crisis. The combined amount of volatility, uncertainty, complexity and ambiguity is close to unmanageable, and limits the possibility to look ahead, plan ahead and move ahead.
Markets are changing, disappearing and growing at an insane speed. Customer needs and behaviour are shifting from an almost +10 year chronic overspend to insecurity and focus on preserving and maintaining the existing. Finding product-market fit in a post-Corona VUCA world is challenging, but at the same time, a land of new opportunities as new needs emerge.
The techniques and methods for bringing your startup business up to the stage of finding product-market fit are especially dominated by design thinking and Lean Startup as described by Board of Innovation. The conventional approach to measure product-market fit is done by using one of three benchmarks; The Sean Ellis test, Net Promoter Score and/or Retention Rate. These methods and techniques are valid also in true VUCA times. But hardly enough to bring you all the way.
Apply imagination to create product-market fit
The creation of product-market fit, especially in post-Corona times, cannot be reduced to a formula. When the VUCA level is high and the possibilities to look, plan and move ahead are blurred, the use of human and soft skills becomes even more important. Creativity, imagination and empathy can empower you to take a deep look into an uncertain future and thereby build your business, products and brands to achieve future product-market fit. Does it sound like fortune-teller magic or hocus-pocus? Well, it is not.
“Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution” Albert Einstein.
By applying imagination, you create new connections between your product, the market and the customers, and you enable yourself to see new combinations, new models and paradigms which are not explored with conventional business thinking. In that way, you can thrive by shaping new markets. With a deep empathy, you get a stronger understanding of your customers and their changing needs and behaviour. Not on a superficial level, but on a more fundamental level.
And with creativity you create the models, concepts and solutions to meet what you imagine and that empathize with customers in their new normal, or as Jørgen Vig Knudstorp, Chairman of Lego has put it “Creativity is the rearrangement of existing knowledge into new, useful combinations.”
A visionary example is the American brand Lowe’s driving of a nationwide chain of home improvement stores. To create future product-market fit, they use Sci-fi narratives to imagine new solutions anchored in specific problem areas and apply exponential technologies. A groundbreaking method that has initiated a number of radical innovations with strong product-market fit. Like exoskeletons for workers to minimize the burden of heavy lifts.
In these true VUCA times with high stress levels and challenging business environments, imagination may seem like a gratuitous luxury, but it is actually a necessity for finding future product-market fit.
Reach out if you need help
If you need help figuring out how to incorporate imagination into your business and innovation processes, please don’t hesitate to reach out. Also, if you have any questions or comments about this article or beyond, drop them in the comments below and our experts will look into it.