In order to understand the context of how our products and services fit into the ever-changing world, we can picture a continuous cycle between preferences, models, and products.*
People have preferences: what do we want?
Visionaries model those desires: “this” is a proxy for “that,” or “this preference” can be met with “that” idea, etc.
Companies sell products to people: we buy approximations of what we really want.
No one knew they wanted an iPhone before the iPhone existed. The product took the model for how we went online (desktops and laptops), sent texts (BlackBerry), and made calls (flip-phones) and changed our preferences for how we did just about everything. We found out we wanted immediate access to the world in a handheld device.
People want a “cool” car, but there’s also a trend towards buying something eco-friendly. Tesla modeled the tech and made the product for an eager audience with a preference Prius wasn’t meeting. It wasn’t for everyone, but it was perfect for a group of people. They got a cool car that also didn’t rely on gas.
There are examples like this everywhere once we start looking for them. Some are very broad while others are very narrow, but they are out there.
In our own jobs and industries, our goal is to always be aware of what the primary preferences, models, and products are. We want to look for what has traction, what’s losing it, and where preferences may be shifting. We can simultaneously understand what’s status-quo and what’s pushing the envelope.
If we don’t bridge the connection between preferences, models, and products, we can get left behind. If we do make the connections, we can open the door to catching a wave that carries us beyond our competition and into the future.
*It’s investment industry-focused, but this idea comes from Alec Litowitz And Brian Portnoy’s paper “The Art And Science of What You Own.”