The value of thinking beyond straight-line growth projections

This blog is part of our series introducing a new approach to build brands that drive change; the Category Growth Agenda. Each week in June we share an example of a brand that has benefited from taking the category view, using that perspective as the basis for successful future growth.

So often predictions of the future are based on straight line extrapolations of the recent past. How will your category grow if it continues on the same trajectory? What happens if it increases +5% faster or decreases -5%?

Traditionally and statistically this optimistic, realistic, pessimistic approach has worked as the basis for brand planning. However, in an era of unprecedented disruption it can be worth exploring one more alternative scenario, a scenario we call the “Fortnite” scenario.

In case you are one of the very few people who haven’t heard of it, Fortnite is the online video game developed by Epic Games and released in 2017. If you plot its growth, normal projections just didn’t work, the brand grew exponentially. It hit a tipping point and took off.

General understanding of the sheer scale of exponential growth is poor, despite the fame of an old Indian legend.

The legend begins with a king who was a big chess enthusiast and who liked to challenge visitors to a game of chess.

One day a sage arrived in the kingdom and was duly challenged by the king. Confident that he would win the king offered any reward that the sage could name. The sage seemingly modestly asked only for a few grains of rice, but in the following manner: the king was to put a single grain of rice on the first chess square and double it on every consequent one.

Having lost the game, the king ordered a bag of rice to be brought to the chess board. Then he started placing rice grains according to the arrangement: 1 grain on the first square, 2 on the second, 4 on the third, 8 on the fourth and so on…

However, it is not long before the king realizes that he will be unable to fulfil his promise, because on the twentieth square the king would have had to put c.1,000,000 grains of rice.

On the fortieth square the king would have had to put c.1,000,000,000 grains of rice.

If the king had completed the task, he would have had to put 18,446,744,073,709,551,615 grains of rice in total on the board. This would equate to 210 billion tons, sufficient to cover the whole of India in a metre-thick layer of rice.

The idea a new brand growing exponentially is not something many brand owners consider but while historically instances of this sort of growth rate were small, that number is growing, albeit not exponentially (yet!).

So, in our approach to helping our clients set future category agendas, we now often include a “Fortnite” scenario as an outlier, which like the best scenario planning makes teams consider options and how they would respond even if it doesn’t happen. The insights this provides are proving useful in thinking more radically about future opportunities and threats.

To find out more about how we can help your brand define their own category growth agenda, contact us at info@thevaluenengineers.com.

BY ENGINEER Giles Lury

giles.lury@thevalueengineers.com