Why designers should follow the stock market
Upon first glance — one would naturally question the connection between finance and design. However, I would argue that they are more interconnected than one would initially assume. Since COVID I’ve had a lot of time and decided to use some of that time to learn more about stocks, investing, and really auditing my own personal finance as a whole.
Firstly, the stock market is all about trends and being able to predict the success (or decline) of a particular company. Whether you analyze a company on a technical basis or a fundamental basis, trends and predictive patterns are essential to any successful investment. The typical design philosophy emphasizes a user-centered process — with the user serving as the main indicator of success. However, design truly does not live in a vacuum and it’s been proven that successful designers must consider not only the user but also the business as a whole as well.
One of my favorite words as of late has been TAM — Total Addressable Market. TAM is a metric used to reference the revenue potential of a potential company or product and quickly gauge product-market fit. In the various stock reports, analysts consistently reference TAM in their valuation of a company, and it's a common term thrown around companies' S-1 filings. As Product Designers, identifying TAM has always been a core part of our design process. Exercises such as competitive analysis help us understand the potential opportunity for our design/product to take advantage of. Through following the stock market, we as designers are able to have a general understanding of what has worked and potential opportunities as well.
Companies such as Peloton have experienced tremendous increases in their stock price by proving their business model, building a loyal customer base, and more. Their success is a clear indication that they are doing something right which can serve as a reference point for competitors and new start-ups to explore. Following the market reveals insights into trends, business opportunities, and strategies that can truly improve business outcomes for your designs. As much as design is creative it's equally tied to business outcomes.
To sum things up, no you don’t have to follow the market if you don’t want to. However, following the market can serve as an invaluable tool for you to leverage within your design career. The terminology and jargon you learn can serve as a unique toolset during conversations with internal stakeholders. Successful and well-designed products have all become publicly traded — i.e Spotify, Slack, and now Doordash and Airbnb!
