Are you Market Driven or Market Driving?

I regularly hear people speak very proudly of doing "market driven development" and as a result, are constantly meeting the needs of their customer. Is simply meeting the needs of your clients something to be so proud of? In some ways, yes - especially considering the amount of companies who fail to do this successfully. I would argue, though, that it isn’t enough. Sure, you can make money out of doing the same old thing the same old way and creating ‘me too’ products to compete as a commodity. But where the hell is the fun in that!?

What about exceeding your customer's needs and delivering products and/or services with added value your customer may not even be aware of? What about innovating and creating new market demand, changing market dynamics, creating new revenue streams, and scaring the shit out of your competition? That’s where the fun and long term value creation is!
So let's take a look at the difference between Market driven and Market driving in a bit more detail.
Market DrivenMarket Driven companies have traditionally been simply taking care of customer needs. A market driven business is a reactive approach to business. By reactive, I mean to say that the business is built on the market trends. Basically, it involves understanding the market features and reacting to those features within the market in order to find success.
This business approach is mainly focused on one thing and that is to meet the customer's requirement based on their preferences. So, in this approach the success is mainly rated by the businesses' ability to attract new customer and retaining old ones. Also, a Market Driven approach does not think beyond its main objectives as discussed earlier to create something unique and out of the box.
Attributes of being a Market Driven company

• Reactive
• Lack speedy innovation
• Static in their approach to serve an existing market
• Conservative and risk averse
• Can quickly fall short of customer expectation set by more innovative competition
• Do not provide innovative solutions which results in a lot of unfulfilled customer demands
• Rigid in their approach and slower to take decisions

Market DrivingA Market Driving business creates disruption in the industry. It is agile, competitive and creates something that is innovative and offers a real value proposition. This model not only enhances competition among your peers, it is also highly customer centric to have your top priority as being one step ahead of your customer's needs and wants.
Take Microsoft Zune Vs Apple iTunes as an example. Microsoft is known to be a market driven company that is risk averse and hence it is late to react with the disruption or the shift in market. Apple is a market driving company due to its massive spend on the latest technology and innovation and it always seems to stay ahead of its competitions due to this. As a result, Zune did not stand a chance in a face-off with iTunes. An argument can also be made that now Apple is the laggard with its innovation with iTunes, allowing for innovative services like Spotify to start taking market share.
Uber is another great example of being a market driving company. They became one of the world's largest taxi company without owning a fleet of cars (and soon may not even employ any drivers). Similarly, Facebook is one of the largest content creating and sharing platforms, however it is not a major contributor. They’re both able to do so and be the leaders in their categories because they are driving the market with innovation and disruptive products.
Attributes of being a Market Driving company:

• Proactive and surprise customers by delivering value
• Quick to innovate, deliver quality and add features to the existing product developments
• Dynamic when it comes to creating a new market or growing existing markets
• Take calculated risks aligned to their growth strategy
• Can provide more value and satisfaction to the customer
• Undertake difficult customer challenges and provide a creative solution
• More agile and implement change at a faster pace

A company can be both Market Driven and Market Driving at the same time. This scenario helps company in protecting their cash flow while still investing in technological innovation. Which strategy is best? I strongly believe in and have the most fun with Market Driving development. However, it varies from company to company and business leader to business leader.
The bottom line is that although it is great to present an idea in the market, it is not enough. You have to back the idea, be innovative, and change market dynamics to your favor.
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