Imagine developing a digital product you believe will revolutionize the market, only to find countless similar offerings already out there. Standing out requires more than just an exceptional product – it often demands rethinking your business model altogether.

In November 2024, a Disruption Forum brought together design leaders to discuss these challenges. A standout session featured Terry Behan, a design strategist with extensive experience in global and emerging markets. His insights shed light on how companies can rise above the noise in competitive markets.

Here, we’ll explore key takeaways from that discussion, focusing on how businesses can deliver value in innovative ways. From aligning products with market needs to experimenting with fresh business models, these strategies can help your product thrive.

Let’s dive into examples like Hilti, which shifted from selling tools to offering them as a service, and examine how product designers play a crucial role in these transformations.

Five stages of product success

Building a great product is just the start. Bringing it to life requires navigating a series of milestones. Terry outlined a “five stages of fit” framework that guides this journey step by step.

1. Problem-solution fit

Every successful product begins by addressing a specific need. The first step is identifying a gap in the market and creating a solution.

For instance, Slack tackled the inefficiencies of workplace communication, offering a tool that streamlined collaboration and added immediate value.

2. Product-market fit

The next step is ensuring the product resonates with users. Does it solve the problem effectively enough for people to prefer it over alternatives?

Achieving product-market fit means creating something indispensable – a solution users can’t imagine living without.

3. Growth readiness

Before scaling, businesses must validate their product and business model. Rushing this process often leads to setbacks.

Growth should be methodical. By refining your offering and ensuring operational readiness, you can lay a sustainable foundation for expansion.

4. Business model alignment

Scaling success depends on adopting a business model that complements your product. Experimentation is key to finding the structure that maximizes value for users while ensuring long-term viability.

5. Scalability fit

The final stage involves preparing your business to scale without compromising quality. Prototyping and gradual growth allow you to adapt and refine processes based on real-world feedback.

Innovative business models

Rethinking your business model can unlock new opportunities. Here are a few examples that have proven effective:

Freemium to premium

This approach offers a free version of the product to attract users, with the option to upgrade for additional features. Spotify exemplifies this model by providing a free tier with ads, nudging users toward its premium subscription.

Subscription-based services

Subscription models provide consistent revenue while offering convenience. HelloFresh simplifies meal preparation by delivering fresh ingredients and recipes to subscribers, catering to busy households.

Product-as-a-service

Instead of selling products outright, this model focuses on outcomes. Hilti, for example, offers tools as a subscription, including maintenance and replacements. Rolls-Royce applies a similar approach with its “power by the hour” service for jet engines.

Micropackaging

In markets where affordability is key, smaller product sizes can reach wider audiences. Offering detergent in 50g sachets instead of 5kg bags has proven successful in emerging economies.

On-demand production

Platforms like Kickstarter enable businesses to validate demand before investing in production. This minimizes risk and ensures resources are used effectively.

Cooperative ownership

Sharing ownership of high-cost items makes them more accessible. John Deere, for example, facilitates shared ownership of farming equipment, reducing costs for small-scale farmers.

Putting it all together

Differentiating your business requires a strategic approach. Start by solving a real problem, ensure your solution resonates with users, and choose a business model that aligns with your product. Scale gradually, learning and refining along the way.

Three guiding principles

1. Test and refine: Experimentation minimizes risks and identifies the most effective strategies.
2. Prototypes matter: Testing early concepts saves time and resources in the long run.
3. Pace your growth: Sustainable growth relies on small, calculated steps.

The future of business models

Flexibility will define the future of successful business models. Companies must prioritize how they deliver value, not just what they offer.

User preferences will drive innovation, from AI-powered interfaces to customizable experiences. While technology will play a major role, critical decisions like choosing the right business model will remain a human endeavor.

Combining human creativity with advanced technology will pave the way for sustainable success, creating solutions that benefit both businesses and their users.