Have you ever stopped to think about how that electronic device you are looking at right now ended up in front of you? Thinking about that will make you a better business leader. That’s because if you want to change the world, you first have to know how it works right now. One of the key ways you can extend your impact and advance your career is to be curious about the way things work.
You use your phone every day, but did you ever stop to think about how it got to you? Take a moment and imagine it. What were all the steps involved in designing your smartphone? How many component parts came together to build it? Where were each of those parts designed and built? What raw materials went into them? Where did those materials come from? How many people have touched that device from how many different companies before it ended up in your hands? You probably don’t have answers for all of these questions. Good. Become curious about them. And try this daily practice:
- Once a day, stop.
- Look at what you are doing.
- Ask yourself, how did this thing (hamburger, doctor, text book, website, cash machine, whatever!) come to be serving me right now?
- See if you can map out the supply chain or lifecycle of that product or service.
- Bonus step 1: On days when you have five free minutes, do a little internet research to validate your suppositions.
- Bonus step 2: talk to your friends about it. Put your heads together and see if you can actually answer some of the
More to chew on: Be curious.
Once you have started thinking about supply chains and product life cycles, you are on your way to developing deeper common sense about the way the world works. Even when you are wrong in your hypotheses, noodling the question with your own gray matter is what will make you smarter.
Then you can move on to some more advanced questions, like market sizings. I love to teach market sizing to my students because when you get good at this kind of educated guestimation, the world starts to open up for you in a new way.
Want to test yourself? Download this Market Sizing Problem Set and see how many you can solve before you google the answer!
Here’s an example of what I mean: How many hamburgers are sold in the US every year?
If you had to answer this question, where would you start? Would you start with:
- The number of cows in the country?
- The number of restaurants? Supermarkets? Both?
- The amount of ketchup sold?
- The number of companies that manufacture hamburgers?
- The population as a whole?
Would you make assumptions based on:
- Geographic location (north vs south? City vs rural?)
- Gender or race (do men eat more hamburgers on average?)
- Socioeconomic class?
- Seasons or holidays (do people eat more burgers in the summer?)
Would you adjust your numbers for:
- The rise of vegetarianism?
- The rise of Paleo?
- Concerns about mad cow, E.coli, or whatever awful meat borne illness we are worried about right now?
- The struggling economy?
- Increased awareness of the environmental impact of mass bovine farming?
How would you come up with a number you feel confident about?
The cool thing about market sizing is that there is no one right way to do it. It’s still educated guessing, and using what you already do know is usually the best place to start. If you look at the above questions, you do have an understanding of some of those concepts and trends. You probably know the approximate population of the US is 300 million. You probably have several friends who eat Paleo and vegetarian. You can observe your own hamburger eating behavior (why yes, I DO eat more burgers in the summer!)
Using what you know, see if you can tackle this question and don’t google the answer until you have really thought it through. Then download this medium difficulty Market Sizing Problem Set
and see how far you can push your business thinking abilities.