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  • May–June 2020
  • Article
  • Harvard Business Review

The New-Market Conundrum

By: Rory McDonald and Kathleen M. Eisenhardt
  • Format:Print
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Abstract

Brand-new markets are like the wormholes of science fiction, where the usual rules of time and space do not apply. When a market has just been born, the forces of competition there are constantly in flux, it’s unclear who your customers really are, and conventional strategies just don’t make sense. How then can you navigate this constantly shifting terrain?

Over the past few years, we have interviewed entrepreneurs and corporate innovators in new fields such as genomics, augmented reality, and fintech. We discovered that the most successful ones practice something called “parallel play,” exploring and testing the world the way preschoolers do. Instead of trying to differentiate their businesses, they observe what others in the market are doing and borrow ideas. After relentless experimentation, they commit to a single template for creating value. But rather than quickly optimizing that template, they leave it partially undetermined and pause, watch, and wait. As they gather serendipitous insights and the market begins to settle, they refine their models bit by bit.

Keywords

New Markets; Markets; Business Model; Strategy; Framework; Innovation and Invention; Value Creation

Citation

McDonald, Rory, and Kathleen M. Eisenhardt. "The New-Market Conundrum." Harvard Business Review 98, no. 3 (May–June 2020): 75–83.
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About The Author

Rory M. McDonald

Technology and Operations Management
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More from the Authors

    • December 2022
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    Shaping Nascent Industries: Innovation Strategy and Regulatory Uncertainty in Personal Genomics

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    • September 2022
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    A Spanner in the Works: Category-Spanning Entrants and Audience Valuation of Incumbents

    By: Rory M. McDonald and Ryan T. Allen
    • MIT Sloan Management Review

    Mastering Innovation's Toughest Trade-Offs

    By: Christopher B. Bingham and Rory M. McDonald
More from the Authors
  • Shaping Nascent Industries: Innovation Strategy and Regulatory Uncertainty in Personal Genomics By: Cheng Gao and Rory McDonald
  • A Spanner in the Works: Category-Spanning Entrants and Audience Valuation of Incumbents By: Rory M. McDonald and Ryan T. Allen
  • Mastering Innovation's Toughest Trade-Offs By: Christopher B. Bingham and Rory M. McDonald
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