Demand engineering

Mental models for growth

Hi all -

I continue to think about demand vs. supply. The more time I spend on it, the more interesting the topic gets.

Last week I wrote about demand systems: Minimum viable systems that help capture, convert, and retain demand.

This week I’ve been thinking about the mental models we use for growth - and how we should adjust them for demand-first businesses.

What is demand?

Demand is THE most powerful force in the economy. Demand pulls businesses into existence; lack of demand crushes businesses into obsolescence. As the shape of demand changes and evolves, so too does the opportunity space for businesses.

Demand is THE upstream variable for business - if you get demand right, all other downstream problems get easier.

Most simply, demand is what people want.

Unfortunately, most people look at business too far downstream - from a supply-first perspective. They think of their products, features, organizations first, and try to figure out demand afterwards. But even if everything downstream of demand theoretically “works”, without demand you’re left with nothing.

River engineering vs. hunting and farming

In startup-land, you hear about “hunters” (salespeople) and “farmers” (account reps). These mental models lead you astray. They put too much power in the hands of the hunter and the farmer, when power actually resides with demand.

My mental model for growth is “river engineering” - redirecting rivers. With this mental model I am under no illusion of having power over the river - the best I can do is to channel and redirect the power the river already has.

And this mental model can be extended - demand can be fast-moving or stagnant. It can be wide or narrow, roaring or a puddle. It can have a ton of potential energy - dammed up - or very little.

The river engineering mental model also begs the question, “where are you redirecting the river?” You can’t redirect the river where it doesn’t want to go; you can redirect it poorly and flood places you didn’t want to flood; you can redirect it perfectly yet someone upstream can redirect your river.

That’s enough about rivers from me today. What do you think? Is this mental model helpful?

— Rob