How Do Innovators Spot Market Opportunities?

The following article articulates how innovators spot market opportunities, this is why I have written a couple of books as we bring knowledge from having seen it somewhere else before. Aivars Lode

By Leslie Brokaw

Executives need the ability to quickly spot both new opportunities and hidden risks. Asking the right questions can broaden perspective and shake up existing assumptions.

How well do you understand the implications of broad market trends and less visible undercurrents for your business? How much have you thought about how those trends impact your own strategic choices? 

Those are questions posed by Paul J.H. Schoemaker (Wharton School) and Steven Krupp (DSI) in their article “The Power of Asking Pivotal Questions,” in the Winter 2015 issue of MIT Sloan Management Review . The article builds on the authors’ book Winning the Long Game: How Strategic Leaders Shape the Future (PublicAffairs, 2014).

The authors provide three tips for companies whose goal is to stay at the front of their industries:

1. Learn from startups.

Innovators pay attention to what new companies are doing — and why. They ask: What do those companies see that I don’t? Schoemaker and Krupp recommend examining startups’ moves to detect market shifts and emerging opportunities from the outside in.

2. Go to conferences outside your function or industry.

“In its ‘Connect + Develop’ innovation program, Procter & Gamble Co. reaches out to companies outside the consumer products industry to share lessons and explore joint challenges,” write Schoemaker and Krupp. “Follow events in other regions and sectors, even if they seem unrelated to your business at first.”

3. Leverage current networks and join new ones.

How might you engage your existing networks more systematically to stay on top of new developments? Schoemaker and Krupp suggest joining interest groups in adjacent businesses or areas to expand your worldview and examine questions you don’t typically consider.

“The best entrepreneurs excel at peeking around the corner and seeing the future sooner,” the authors write. “We’ve found that leaders can learn to anticipate better by simply being more curious, looking for superior information, conducting smarter analyses and developing broader touch points with those in the know.”

Schoemaker and Krupp highlight the entrepreneur Elon Musk of Tesla Motors, SpaceX and SolarCity as a model for his ability to spot unmet market needs. 

Musk has said that his forward-thinking style, exemplified in his vision of commercializing electric vehicles for the mass market, comes from “just trying really hard — the first order of business is to try. You must try until your brain hurts.” Musk envisioned electric vehicles as the future for the automotive industry but also thought that traditional car companies would take too long to fully embrace the challenges and opportunities.

One of Musk’s biggest tasks with Tesla was to demonstrate that electric cars could be a mainstream product. He expanded his enterprise to include global distribution and battery manufacturing shortly after Consumer Reports rated the Tesla Model S the number one car it ever tested.

“Strategic leaders are focused on the future and are masters at asking discerning questions and exploring ideas and options that are outside the mainstream,” Schoemaker and Krupp note. “They are wary of status quo views and prefer honest, transparent questions that focus on how much, or how little, is really known about the issue at hand.”