There is a lot of talk around the rise, nay - the rapid lightening rise of AI LLMs, Gen AI and more. The rhetoric around its being innovation-driven is to be heard a lot nowadays; there is no denying their innovative and inventive background reality. To deny that would be abject foolishness - but that does not mean it is the innovation that won the market. Innovation never wins markets - and that, in a world where absolutes cannot stated, is an absolute.
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The Prerequisites for Winning Markets
A market victory requires purchasing customers, the right ecosystem, available finance and regulations, and a demonstrable value proposition - not one of these is negotiable. Therefore, let me take a quick look at the growth of the LLM phenomenon from the eye of a marketer
First of all - there is nothing like a product-led innovation - innovation is always market-led. Unless there was some history of innovations winning in the market, there would be fewer risk takers in the market; every brilliant innovation requires a customer. A product can create a new way of satisfying a need, but it does not create the fundamental human/economic motivation from nothing. Innovative products can, at best, create new markets by recombining needs in ways customers did not previously conceptualise.
The Fallacy of Universal GTM Playbooks
Second, GTM does not have an "established" playbook - if you are using a playbook, you are already outdated, or sub-optimal. GTMs have to be designed for each company - they may turn out similar, but htere is no one-size-fits-many. There are broad strokes that look like playbooks, but these are best treated as guides, giving you some direction as you set the GTM engine for your company. So, the modern GTM - no such thing. GTM has to be individually designed for each company, not even each industry - so if you are using old playbooks, the results will be sub-optimal. Keep updating your frameworks - but remember, these are frameworks, guides at best.
Latent vs. Kinetic Demand
Demand is of two types - (top level basic look) - potential / latent demand, and kinetic demand. All - ALL - successful "product-led" does is to top into the latent demand. This latent demand - the market may not yet have found the optimal product-value-price proposition to convert that latent need into widespread purchasing. Demand, thus, cannot be created by GTM, Engineering or Marketing - this is an established reality : GTM and marketing cannot manufacture fundamental human or economic need out of nothing. They can discover, expose, shape, stimulate and activate latent demand. And that is why you must understand the demand aspects of your business in-depth, which sadly very few people do nowadays.
Unless there is a demand, potential, lying in the market - your product is of no use, for no customers will be created, regardless of how new the technology is, and how few people use this. It all boils down to the "need" - your product has to fulfill a need - it can be at any level, but there has to be a need.
And this need - this is the market. That is the market factor in all innovative products that succeeded, There is only one segment that doesnt obey these rules - Ultra Luxury Goods. This is known.
Case Studies: OpenAI and Anthropic
OpenAI - they were hardcore market-led innovations - the product's innovative potential had a demand factor that was present. That is why the adoption sky-rocketed. ChatGPT did not invent the demand for knowledge, advice, writing, research or problem-solving. It dramatically reduced the friction and cost of satisfying those existing demands. What it did was changed the underlying factors making solutions accessible, cheaper and faster to a majority of people, changing the nature of the demand from latent to kinetic.
Claude, Anthropic did not create a new category - that is fallacy. At best, Anthropic may have created a new solution category. The need for faster solutions, data mining, deep data predates AI, and customers were already hunting for solutions to faster processing. What they did was create a product that solved several layers of needs at the same time - access to data, research, processiing power, automation etc. Individually, all were in vogue - so, no, there was no product-led innovation there.
The Cybersecurity PV Equation
There is demand, certain - it is at a latent or potential level - cybersecurity has an underlying need, not fulfilled completely by anyone. The issue is the underlying PV equation sweet spot lies undiscovered, and the industry is currently going after early adopters, rather than investing into expanding the market - for the perfectly simple reason that they will create kinetic demand, others will tap in. It is about the need - the basic core of the human factors in the market, the rising cases of fraud and hacking etc. The demand problem isn't absence of need. It is failure to discover the optimal value proposition capable of converting latent need into mass-market willingness to pay. A large latent market does not automatically become a large kinetic market. Innovation's commercial task is to discover the PV equation that converts one into the other.
The Role of Early Adopters
There is definitely demand for innovation - this is established marketing for at least 50+ years. We study it in the first class in MBA Marketing Subject - it is called Early Adopters. They are people who actively invest in buying the most innovative products and services - it is also a known psychological trait. Early adopters aren't necessarily evidence of mass-market demand, but they are evidence of willingness to adopt innovation ahead of the mainstream. These early adopters prove that a segment exists that values innovation.
Conclusion : Commercial Adoption
There is no commercially successful product innovation in isolation from a market need. Technology can create new products, new categories and even new behaviours. But commercial adoption ultimately requires those capabilities to intersect with a human or economic need. The critical distinction is not whether demand exists, but whether it is latent or activated. Early adopters demonstrate that a need can be activated in a small population.
The real innovation challenge is discovering the value proposition, economics and GTM that convert latent demand into mainstream demand. There are established GTM principles, but there is no universal GTM playbook. The architecture has to be designed for the specific product, customer, category and economics. The role of innovation is therefore not to manufacture demand from nothing, but to discover a superior way of converting existing or emerging needs into value.
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